Acquisition of Land and Building
Response to the following problem:
On February 1, 2010, Edwards Corporation purchased a parcel of land as a factory site for $50,000. It demolished an old building on the property, and began construction on a new building that was completed on October 2, 2010. Costs incurred during this period are:
Demolition of old building $ 4,000
Architect's fees 20,000
Legal fees for title investigation and purchase contract 2,000
Construction costs 500,000
The company sold salvaged materials resulting from the demolition for $3,000.
Required
At what amount should Edwards record the cost of the land and the new building, respectively?