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February 1, 2018, Salisbury Company purchased land for the future factory location at a cost of $87,000. The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2018.
Costs incurred during this period were:
Item AmountDemolition dilapidated building $3,400Architect Fees $11,250Legal Fees - for title search $1,150Interest during active construction period $5,025Real estate transfer tax $1,200Construction Cost $605,000
Problem 1: Using this information, how much should be recorded as the cost of the land?
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