On February 1, 2010, Morgan Company purchased a parcel of land as a factory site for $200,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2010. Costs incurred during this period are listed below: $20,000 - Demolition of old building $35,000 - Architect's fees $5,000 - Legal fees for title investigation and purchase contract. $1,090,000 - Construction costs Salvaged materials resulting from demolition were sold for $10,000. Morgan should record the cost of the land and new building, respectively, as: $225,000 and $1,115,000 $210,000 and $1,130,000 $210,000 and $1,125,000 $215.000 and $1.125.000
On February 1, 2010, Morgan Company purchased a parcel of land as a factory site for $200,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2010. Costs incurred during this period are listed below: $20,000 - Demolition of old building $35,000 - Architect's fees $5,000 - Legal fees for title investigation and purchase contract. $1,090,000 - Construction costs Salvaged materials resulting from demolition were sold for $10,000. Morgan should record the cost of the land and new building, respectively, as: $225,000 and $1,115,000 $210,000 and $1,130,000 $210,000 and $1,125,000 $215.000 and $1.125.000
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 38P
Related questions
Question
![On February 1, 2010, Morgan Company purchased a parcel of land as a factory
site for $200,000. An old building on the property was demolished, and
construction began on a new building which was completed on November 1,
2010. Costs incurred during this period are listed below:
$20,000 - Demolition of old building
$35,000 - Architect's fees
$5,000 - Legal fees for title investigation and purchase contract.
$1,090,000 - Construction costs
Salvaged materials resulting from demolition were sold for $10,000.
Morgan should record the cost of the land and new building, respectively, as:
$225,000 and $1,115,000
$210,000 and $1,130,000
$210,000 and $1,125,000
$215.000 and $1.125.000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5bd9fd3d-4f4d-4003-91c9-9c50e6822cb0%2F3482cf64-399e-4ff6-89e3-24622a4093c3%2F5kzo0bl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On February 1, 2010, Morgan Company purchased a parcel of land as a factory
site for $200,000. An old building on the property was demolished, and
construction began on a new building which was completed on November 1,
2010. Costs incurred during this period are listed below:
$20,000 - Demolition of old building
$35,000 - Architect's fees
$5,000 - Legal fees for title investigation and purchase contract.
$1,090,000 - Construction costs
Salvaged materials resulting from demolition were sold for $10,000.
Morgan should record the cost of the land and new building, respectively, as:
$225,000 and $1,115,000
$210,000 and $1,130,000
$210,000 and $1,125,000
$215.000 and $1.125.000
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