PROBLEM 26-1 (AICPA ADAPTED)

1 A. 9 250 000
Cost of the Factory Building

Cost of razing old building 300 000

Architect fee 950 000
New building Construction cost 8 000 000
Total Cost of Building 9 250 000

2 A. 4 700 000
Cost of Land

Land 4 500 000

Tittle insurance and legal fees of purchase land 200 000
Total Cost of Land 4 700 000

PROBLEM 26-2 (AICPA ADAPTED)

1 A. 4 200 000
Initial Carrying Amount of Land
 Purchase Price (Land) 4 000 000
Legal Fees 150 000
Title gurantee insurance 50 000
Initial Carrying Amount 4 200 000

PROBLEM 26-3 (AICPA ADAPTED)

1 B. 620 000

Land 600 000

Legal fees for purchase contract 20 000
Total Cost of Land 620 000

2 B. 3 600 000

Construction Cost of new building 3 500 000

Architect Fee 80 000
 Demolition of old building 50 000
Less: Sale of scrap from old building (30 000)
Total Cost of Building 3 600 000

PROBLEM 26-4 (IAA)

1 A. 5 675 000

Construction cost of new building 5 400 000

Architect Fee 175 000
Demolition of old Building 100 000
Less: Salvaged Materials resulting from
demolition (50 000)
Cost of Building 5 675 000

PROBLEM 26-5 (IAA)

1 A. 4 550 000

Fair value of Land 4 250 000

Title insurance and legal fees to purchase land 200 000
Survey before construction 100 000
Total Cost of Land 4 550 000

2 C. 9 800 000

Cost of demolishing old building 300 000

New Building construction cost 8 000 000
Architect Fee 950 000
Building permit or payment to cityhall 150 000
Excavation before new construction 200 000
Liability Insurance during construction 100 000
Cost of lighting and signage 100 000
Total Cost of New Building 9 800 000

3 A. 950 000

New fence surrounding the new building 100 000

Driveway, parking bay and safety lighting 550 000
Cost of trees, shrubs and other lanscaping 300 000
Total Cost of Land Improvements 950 000