WEEK 1 ASSIGNMENT
E 10–1: Acquisition costs; land and building
LO10–1
On March 1, 2013, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2013. Costs incurred during this period are listed below:
Salvaged materials resulting from the demolition of the old building were sold for $2,000.

Demolition of old building $ 4,000
Architect’s fees for new building 12,000
Legal fees for title investigation of land 2,000
Property taxes on land (for period beginning March 1, 2013) 2,000
Construction costs 500,000
Interest on construction loan 5,000
Required:
Determine the amounts that Beldon should capitalize as the cost of the land and the new building.
Capitalized cost of land: Purchase price $60,000 Demolition of old building $4,000 Sale of materials (2,000) 2,000 Title Investigation fees 2,000 Total cost of land $64,000
Capitalized cost of building: Construction costs $500,000 Architect's fees 12,000 Construction loan interest 5,000 Total cost of building $517,000 E 10–8: Lump-sum acquisition
LO10–2
Pinewood Company purchased two buildings on four acres of land. The lump-sum purchase price was $900,000. According to independent appraisals, the fair values were $450,000 (building A) and $250,000 (building B) for the buildings and $300,000 for the land.
Required:
Determine the initial valuation of the buildings and the land.
Fair Values
Building A $