China Express purchased land for $140,000. Prior to construction on the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below:Land clearing costs$ 5,000Architect fees (for new building)30,000Legal fees for title investigation of land1,000Property taxes on land (for the first year)2,500Building construction costs440,000 Required:Determine the amounts that should be recorded in the land and the new building accounts.

The cost incurred in respect of the Purchase price of land, Land clearing costs, and the Legal fees…

Answered: China Express purchased land for…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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China Express purchased land for $140,000. Prior to construction on the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below:

Land clearing costs	$ 5,000
Architect fees (for new building)	30,000
Legal fees for title investigation of land	1,000
Property taxes on land (for the first year)	2,500
Building construction costs	440,000

Required:
Determine the amounts that should be recorded in the land and the new building accounts.

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