Acquisition of Land and Building On February 1, 2007 Edwards Corporation purchased a parcel of land as a factory site for $50,000. It demolished an old building on the property, and began construction on a new building that was completed on October 2, 2007. Costs incurred during this period are:
|
Demolition of old building |
$4,000 |
|
Architect’s fees |
20,000 |
|
Legal fees for title investigation and purchase contract |
2,000 |
|
Construction costs |
500,000 |
The company sold salvaged materials resulting from the demolition for $3,000.
Required
At what amount should Edwards record the cost of the land and the new building, respectively?