15: A.2. Recording Fixed Assets

Question 1

During 20X5, Burr Co. had the following transactions pertaining to its new office building:

Purchase price of the land $60,000
Legal fees for contracts to purchase land 2,000
Architect’s fees 8,000
Demolition of old building on site 5,000
Sale of scrap from old building 3,000
Construction of new building (fully completed) 350,000
In Burr’s December 31, 20X5 balance sheet, what amounts should be reported as the cost of the land and the cost of the building?

A. Land $62,000; Building $360,000
B. Land $60,000; Building $360,000
C. Land $65,000; Building $361,000
D. Land $64,000; Building $358,000

Answer 1

D is the correct answer