The Italian Bread Company purchased land as a factory site for $64,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows: Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Property taxes on the land (for the first year) Building construction costs Interest costs related to the construction Purchase price of land Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Building construction costs Interest costs related to the construction Totals Required: Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be indicated by a minus sign.) Land $ 8,400 (1,100) 17,000 2,400 3,400 Building 540,000 20,000

The Italian Bread Company purchased land as a factory site for $64,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows: Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Property taxes on the land (for the first year) Building construction costs Interest costs related to the construction Purchase price of land Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Building construction costs Interest costs related to the construction Totals Required: Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be indicated by a minus sign.) Land $ 8,400 (1,100) 17,000 2,400 3,400 Building 540,000 20,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 23P

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