Problem:
On August 1, 2023, Maltese Co. purchased a tract of land for $800,000. Maltese intends to build its new factory on the land. An old building on the property was demolished at a cost of $100,000, and salvaged materials resulting from the demolition were sold for $25,000. Additional costs incurred during the period August 1, 2023, to December 31, 2023, were as follows: Construction costs for new factory: $400,000 Interest on construction loan while the factory was being built: $11,000 Legal fees for purchase contract: $6,000 Title guarantee insurance: $8,000 Cost to pave the new parking lot and install lighting: $9,000 On Maltese's December 31, 2023, balance sheet what amounts should be reported as land and factory? Select answer from the options below Land = $814,000 and Factory = $486,000 Land = $875,000 and Factory = $411,000 Land = $889,000 and Factory = $420,000 Land = $889,000 and Factory = $411,000