Question: On January 6, 2014, the Eldorado Corporation purchased a tract of land for a factory site for $650,000. An existing building on the site was demolished and the new factory was completed on October 11, 2014. Additional cost data are shown below:
| Title search and transfer documents |
$ |
1,875 |
| Construction cost of new building |
|
1,120,000 |
| Real estate and attorney fees |
|
8,125 |
| Costs to level the land |
|
4,750 |
| Architects' fees |
|
12,500 |
Which of the following correctly states the cost that should be recorded for
(a) the land and
(b) the new building?
$651,875/$1,145,375
$664,750/$1,132,800
$677,250/$1,120,000
$664,750/$1,132,500