Wilson Co. purchased land as a factory site for $600.000. Wilson paid $60,000 to

Question

Wilson Co. purchased land as a factory site for $600.000. Wilson paid $60,000 to tear buldings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were pakd to investigation and making the purchase. Architect's fees were $31,200. Title insurance cos $2,400, and liability insurance during construction cost contractor was paid S2.200,000. An assessment made by the city for pavement was Interest costs during construction were $170,000. for title $2.600. Excavation cost $10,440. The $6,400. 1. The cost of the building that should be recorded by Wilson Co. is Indicate for each item what amount if any to include: Land Demolition Salvage Legal fees Architect fees Title Insurance Liability Insurance Excavation Contractor City assessment Interest costs Total all A) $2,403,800. B) $2,404,840 C) $2,413,200. D) $2,414,240

Explanation / Answer

Solution - Calculation of cost of building

Particulars Amount Land - Demolition - Salvage - Legal fees - Architect fees $31200 Title Insurance - Liability Insurance $2600 Excavation $10440 Contractor $2200000 City Assessment - Interest Cost $170000 Total cost of building $2414240

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