E10-1 On March 1, 2021, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building $ 4,500

Architect's fees (for new building) 13,000

Legal fees for title investigation of land 2,500

Property taxes on land (for period beginning March 1, 2018) 3,100

Construction costs 510,000

Interest on construction loan 5,500

Salvaged materials resulting from the demolition of the old building were sold for $2,100.

Required:

Determine the amounts that Beldon should capitalize as the cost of the land and the new building.

Determine the amounts that Beldon should capitalize as the cost of the land. (Amounts to be deducted should be indicated with a minus sign.)

Question

Aliya Baxter

Business

13 January, 02:45

E10-1 On March 1, 2021, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building $ 4,500

Architect's fees (for new building) 13,000

Legal fees for title investigation of land 2,500

Property taxes on land (for period beginning March 1, 2018) 3,100

Construction costs 510,000

Interest on construction loan 5,500

Salvaged materials resulting from the demolition of the old building were sold for $2,100.

Required:

Determine the amounts that Beldon should capitalize as the cost of the land and the new building.

Determine the amounts that Beldon should capitalize as the cost of the land. (Amounts to be deducted should be indicated with a minus sign.)

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Answers (1)

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Glover · Answer 1

The amounts that Beldon should capitalize as the cost of the land and the new building is $64,900 and $528,500 respectively

Explanation:

The computations are shown below:

For land:

= Purchase value of the land + Demolition of old building + Legal fees for title investigation of land - Salvaged materials

= $60,000 + $4,500 + $2,500 - $2,100

= $64,900

For building:

= Architect's fees (for new building) + Construction costs + Interest on construction loan

= $13,000 + $510,000 + $5,500

= $528,500