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February 1, 2018, Salisbury Company purchased land for the future factory location at a cost of $122,000
February 1, 2018, Salisbury Company purchased land for the future factory location at a cost of $122,000. The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2018. Costs incurred during this period were:
|
Item |
Amount |
|
Demolition dilapidated building |
$2,000 |
|
Architect Fees |
$11,250 |
|
Legal Fees - for title search |
$1,350 |
|
Interest During Active Construction Period |
$5,025 |
|
Real estate transfer tax |
$825 |
|
Construction Costs |
$605,000 |
Using this information, how much should be recorded as the cost of the land?
Expert Solution
Salisbury CompanyCost of LandLand Cost$ 1,22,000.00Add: Cost of Demolition dilaplated building$ 2,000.00Add: Legal fees for title search$ 1,350.00Total cost of Land$ 1,25,350.00
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