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.
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.