On February 1, 2012, Badger Corporation purchased a parcel of
land as a factory site for $50,000. An old building on the property
was demolished, and construction began on a new building that was
completed on December 12, 2012. Costs incurred during this period
are listed below:
Demolition of old building
$ 10,000
Architect's fees
26,000
Legal fees for title investigation
and purchase contract
3,000
Construction costs
1,000,000
(Salvaged materials resulting from demolition were sold for
$18,000.)
Badger should record the cost of the land and the cost of the
new building, respectively, as
a.
$48,000 and $1,026,000
b.
$45,000 and $1,026,000
c.
$63,000 and $1,032,000
d.
$63,000 and $1,017,000
