Q1) Martin Buber Co. bought land as factory site for $400,000. Company paid $42,000 to raise old buildings and sold salvaged lumber and brick for $6,300. Legal fees of $1,850 were paid for title investigation and drawing purchase contract. Martin Buber paid $2,200 to engineering firm for land survey, and $68,000 for drawing factory plans. Land survey had to be made before definitive plans could be drawn. Title insurance on property cost $1,500, and liability insurance premium paid in construction was $900. Contractor's charge for construction was $2,740,000. Company paid contractor in two installments: $1,200,000 at the end of 3 months and $1,540,000 upon completion. Interest cost of $170,000 were incurred to finance the construction.
Instructions:
Find out the cost of land and cost of building as they must be recorded on books of Martin Buber Co. Suppose that land survey was for building.