The amount that Beldon should capitalize as the cost of the land IS
$64,000
The amount that Beldon should capitalize as the cost of the new building.is $517,000
Step-by-step explanation:
Using the data from the question
Given that the
- Land Purchase price $60,000
- Demolition of old building $2,000 ($ 4,000 - $2,000)
- Legal fees for title investigation of land 2,000
The amounts that Beldon should capitalize as the cost of the land IS
$64,000
In case of New building -The given data is
- Architect’s fees (for new building) 12,000
- Construction costs 500,000
- Interest on construction loan 5,000
The amounts that Beldon should capitalize as the cost of the new building.is $517,000