Reference no: EM13567493
The Sierra Corp. acquired a piece of land with a building on it for $240,000. The fair value of the land is $180,000 and the fair value of the building is $60,000. Sierra's intent is to raze the acquired building and construct a new plant on this land site. The following costs were incurred related to this situation: a. Sierra paid delinquent property taxes on the acquired land [these delinquent taxes were a surprise to Sierra] $ 4,500 b. The cost of the real estate commission paid when acquiring the land and building 12,000 c. The cost of a survey of property lines before architectural plans could be drawn for the new building 6,200 d. A fee Sierra received from a contractor for letting the contractor raze the old building and keep all usable materials 18,000 e.
The cost of constructing a temporary fence around the construction site 7,400 f. A finder's fee was paid to the person who found this location for Sierra 10,000 g. The cost of digging a hole for the basement of the new building 53,000 h. The cost of initially installing a sidewalk around the Sierra property [this sidewalk will be maintained by the city] 13,800 i. The cost of initially installing internal sidewalks on the Sierra property 8,100 j. The cost to pour footings for the new plant 66,000 k. The cost to re-pour several footings for the new plant because of improper installation of the original footings 17,500 l. The cost of property taxes incurred during the construction of the new plant 9,100 m. The cost of property taxes incurred during the first year the plant is used 13,500 n.
The cost to pour a new company parking next to the new plant 21,000 o. The cost of landscaping and shrubbery after completion of the new building 31,000 p. The cost to construct a permanent fence around the Sierra property 28,700 Required: Given the above information, compute the total dollar amount that would be reported in both the Sierra "Land" account and the Sierra "Building" account.