E 10’1: Acquisition costs; land and building
LO10’1
On March 1, 2013, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2013. Costs incurred during this period are listed below:
Demolition of building $4000.00
Architect fees (for new building) $12000.00
Legal fees for title investigation of land $2000.00
Property taxes on Land (For period beginning March 1, 2013) $3000.00
Construction costs $500,000.00
Interest on Construction loan $5000.00
Salvaged materials resulting from the demolition of the old building were sold for $2,000.
Required:
Determine the amounts that Beldon should capitalize as the cost of the land and the new building