Reference no: EM132735066

Sandhill Supply Ltd. is a newly formed public corporation that incurred the following costs related to land, buildings, and machinery:

Legal fees for title search $510
Property tax in arrears at property purchase date 5,300
Architect's fees 3,100
Cash paid for land and dilapidated building on it 116,000
Removal of old building $20,300
Less: Salvage 5,960 14,340
Surveying before construction 350
Interest on short-term loans during construction 7,300
Excavation before construction for basement and foundation19,100
Machinery purchased (subject to 2% cash discount, which was not taken) 65,900
Freight on machinery purchased 1,300
Exchange on foreign currency purchase of machinery 1,990
Storage charges on machinery, made necessary because building was still under
construction when machinery was delivered 2,160
New building constructed (building construction took six months from date of
purchase of land and old building) 485,000
Assessment by city for drainage project 1,700
Fence surrounding the property for security 15,600
Hauling charges for delivery of machinery from storage to new building 630
Installation of machinery 1,900
Customs duty on importing machinery 5,500
Municipal grant to promote locating building in the municipality (8,800 )

Problem (a) Determine the amounts that should be included in the cost of land, buildings, and machinery. Also determine the other amounts that are not included in these accounts.