Question

Question 7 View Policies Current Attempt in Progress Nash Co. purchased land as a factory site for $560,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $58,800 to raze the old buildings and sold salvaged lumber and brick for $8,820. Legal fees of $2,590 were paid for title investigation and drawing the purchase contract. Nash paid $3,080 to an engineering firm for a land survey, and $95,200 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,100, and a liability insurance premium paid during construction was $1,260. The contractor's charge for construction was $3,836,000. The company paid the contractor in two installments: $1,680,000 at the end of 3 months and $2,156,000 upon completion. Interest costs of $238,000 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of Nash Co. Assume that the land survey was for the building. Cost of the Land $ Cost of the Building $ e Textbook and Media

Answer 1

	Land	Building
Land	560000
Razing Costs	58800
Less: Salvage	(8820)
Legal Fees	2590
Survey		3080
Plans		95200
Title Insurance	2100
Liability Insurance		1260
Construction		3836000
Interest		238000
Total	$614,670	$4,173,540