Question

The Reid Co. acquired a piece of land for a new factory paying $100,000. Reid demolished the old building at a cost of $20,000, and sold scrapped material salvaged from the old building for $5,000. The architect’s fees were $25,000, and the title insurance upon acquisition of the land was $1,000. The construction period interest was $8,000, and the contractor received $300,000 for the building. A pavement assessment made by the city cost Reid $2,000 at the purchase date.

A) The cost of the land recorded by Reid Co. is
B) The cost of the building recorded by Reid Co. is

Answer 1

Check the explanation

Step-by-step explanation:

A.

Land $ 100,000

Demolition 20,000

Scrap value (5,000 )

Title insurance 1,000

Paving assessment 2,000

Total land cost $ 118,000

B.

Architect fees $ 25,000

Construction interest 8,000

Building cost 300,000

Total building cost $ 333,000

Answer 2

A$118,000 B.$333,000

Explanation

Land$100,000

Demolition20,000

Scrap value(5,000)

Title insurance1,000

Paving assessment2,000

Total land cost($118,000)

B. The cost of the building recorde

d by Reid

Archirectfees$25,000

Construction interest8,000

Building cost300,000

Total building cost. $333,000