Acquisition of Land and Building On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2019. Costs incurred during this period are: Demolition of old building $ 10,000 Architect's fees 20,000 Legal fees for title investigation and purchase contract 4,000 Construction costs 625,000 Edwards sold salvaged materials resulting from the demolition for $2,000. Required: 1. At what amount should Edwards record the cost of the land and the new building, respectively? If an input box should be blank, enter a zero. Land Building Purchase price of land $ $ Demolition of old building Architect's fees Legal fees Construction costs Salvaged materials Total $ $ 2. Next Level If management misclassified a portion of the building's cost as part of the cost of the land, what would be the effect on the financial statement?
Acquisition of Land and Building On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2019. Costs incurred during this period are: Demolition of old building $ 10,000 Architect's fees 20,000 Legal fees for title investigation and purchase contract 4,000 Construction costs 625,000 Edwards sold salvaged materials resulting from the demolition for $2,000. Required: 1. At what amount should Edwards record the cost of the land and the new building, respectively? If an input box should be blank, enter a zero. Land Building Purchase price of land $ $ Demolition of old building Architect's fees Legal fees Construction costs Salvaged materials Total $ $ 2. Next Level If management misclassified a portion of the building's cost as part of the cost of the land, what would be the effect on the financial statement?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 11P
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Acquisition of Land and Building
On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2019. Costs incurred during this period are:
Demolition of old building $ 10,000 Architect's fees 20,000 Legal fees for title investigation and purchase contract 4,000 Construction costs 625,000 Edwards sold salvaged materials resulting from the demolition for $2,000.
Required:
1. At what amount should Edwards record the cost of the land and the new building, respectively?
If an input box should be blank, enter a zero.
Land Building Purchase price of land $ $ Demolition of old building Architect's fees Legal fees Construction costs Salvaged materials Total $ $ 2. Next Level If management misclassified a portion of the building's cost as part of the cost of the land, what would be the effect on the financial statement?
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