Question

Bonita Industries purchased land as a factory site for $1300000. Bonita paid $117000 to tear down two buildings on the land. Salvage was sold for $8400. Legal fees of $5140 were paid for title investigation and making the purchase. Architect's fees were $46500. Title insurance cost $3600, and liability insurance during construction cost $3900. Excavation cost $15140. The contractor was paid $4400000. An assessment made by the city for pavement was $9500. Interest costs during construction were $259000.The cost of the building that should be recorded by Bonita Industries is a) $4405600.b) $4406440.c) $4420400.d) $4724540.

Answer 1

The cost of the building that should be recorded by Bonita Industries is $4,406,440.

Step-by-step explanation:

The cost of the building that should be recorded by Bonita Industries is $4,406,440.

To calculate the cost of the building, we need to add the following expenses:

• Land purchase: $1,300,000
• Cost to tear down buildings: $117,000
• Salvage from demolished buildings: $8,400
• Legal fees: $5,140
• Architect's fees: $46,500
• Title insurance: $3,600
• Liability insurance: $3,900
• Excavation cost: $15,140
• Contractor cost: $4,400,000
• Assessment for pavement: $9,500
• Interest costs during construction: $259,000

Add all these expenses together to get $4,406,440, which is the cost of the building for Bonita Industries.

Answer 2

option b). The cost of the building that should be recorded by Bonita Industries is $4406440.

Step-by-step explanation:

To determine the cost of the building that should be recorded by Bonita Industries, we need to add up all the costs related to the construction of the building. These costs include the contractor's fees, interest costs during construction, legal fees, architect's fees, title insurance, liability insurance, excavation cost, assessment for pavement, and any other costs directly related to the construction. Adding up all these costs gives us a total of $4,406,440. Therefore, the correct answer is $4406440 (option b).