Corner Manufacturing purchases a large lot on which an old building is located a
ID: 2370468 • Letter: C
Question
Corner Manufacturing purchases a large lot on which an old building is located as part of its plans to build a new plant. The negotiated purchase price is $225,000 for the lot plus $120,000 for the old building. The company pays $34,500 to tear down the old building and $51,000 to fill and level the lot. It also pays a total of $1,440,000 in construction cost (this amount consists of $1,354,500 for the new building and $85,500 for lighting and paving a parking area next to the building.) How much of the above payments should be debited to land, to land improvements, to buildings, and to equipment?