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Vaughn Manufacturing purchased land as a factory site for $1345000. Vaughn paid $116000 to tear down two buildings on the land. Salvage was sold for $8100. Legal fees of $5500 were paid for title investigation and making the purchase. Architect's fees were $46900. Title insurance cost $3900, and liability insurance during construction cost $4200. Excavation cost $15860. The contractor was paid $4300000. An assessment made by the city for pavement was $9500. Interest costs during construction were $260000.
1. The cost of the land that should be recorded by Wilson Co. is:_____.
a. $989,880.
b. $980,480.
c $996,280.
d. $986,880.
2. The cost of the building should be recorded by Wilson Co. is:_____.
a. 2,804,840.
b. 2,813,200.
c. 2,803,800.
d. 3,014,240.

Sagot :

Tundexi

Answer:

Cost of Land = $1,471,800

Cost of Building = $4,626,960

Explanation:

Note: "The options attached to the question are incorrect because its belongs to another question entirely and this can be seen as attached as picture below"

1. Cost of Land = Purchase Value + Cost Incurred to Tear Down two Buildings - Salvage + Legal Fees + Title Insurance Cost + Assessment Cost

Cost of Land = $1345000 + $116000 - $8100 + $5500 + $3900 + $9500

Cost of Land = $1,471,800

2. Cost of Building = Architect's Fees + Liability Insurance Cost + Excavation Cost + Contractor's Payment + Interest Cost

Cost of Building = $46900 + $4200 + $15860 + $4300000 + 260000

Cost of Building = $4,626,960

View image Tundexi
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