What is the total cost of the land

Assignment Help Financial Management

Reference no: EM132021984

ABC Co. purchased land that had an existing building on it for $400,000. Legal fees of $1,850 were paid to write the purchase contract.

ABC purchased the land with the intent of building a new building (factory) on the land. The process of tearing down the existing building and constructing the new building will take 6 months.

ABC paid $42,000 to demolish the old building and sold the salvaged lumber and brick for $6,300.

ABC paid $2,200 to XYZ contracting company for a land survey and $68,000 for drawing the blueprints for the new building. The land survey was necessary so that factory plans (blueprints) could be drawn.

The contractor's charge for construction of the new building was $2,740,000. Interest costs of $170,000 were incurred to finance the construction of the building (assume this entire amount is eligible to be capitalized as part of the building cost).

1- What is the total cost of the Land that ABC Co. would record on their balance sheet?

2- What is the total cost of the new building (factory) that ABC Co. would record on their balance sheet?

Reference no: EM132021984

Questions Cloud

What is the fund net asset value : Johnson fund has an offer price of $75 and sells at a 4% discount. What is the fund's net asset value?

Portfolio comprised of two securities : You own a portfolio comprised of two securities, A and B. The weights of A and B in the expected minimum variance portfolio are closest to:

Security analyst at left-handed brothers securities : Lisa Simpson is a security analyst at Left-handed Brothers Securities and has developed the following estimates for Doh!

What is the profit on your arbitrage strategy : What arbitrage would you undertake? What is the profit on your arbitrage strategy?

What is the total cost of the land : What is the total cost of the Land that ABC Co. would record on their balance sheet?

The risk associated with cost of the raw materials : Explain why manufacturer would elect to use long call strategy instead of long forward contract to hedge the risk associated with cost of the raw materials

The present value of the introduction of the new chip : What is the proper cash flow to use to evaluate the present value of the introduction of the new chip?

Anthony and transfers the note for value to dawson : Anthony indorses the note by writing on it “Without recourse, Anthony” and transfers the note for value to Dawson.

Strategic direction-performance of organization is termed : The relationship among stakeholders used to determine and control the strategic direction and performance of an organization is termed:

User Account

All Pages