On February 1, 2010, Reardon Corporation Purchased a Parcel of Land

question 74

Essay

On February 1, 2010, Reardon Corporation purchased a parcel of land as a factory site for $320,000. An old building on the property was demolished and construction begun on a new warehouse that was completed April 15, 2011. Costs incurred on the construction project are listed below.

Determine the cost of the land and new building.

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Definitions:

Unrealized Gains

Profits that have been achieved on paper from investments but have not yet been sold for cash, and therefore are not reflected in the income statement.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest.

Fair Value Adjustment

An accounting process to adjust the book value of assets or liabilities to their current market value, often for financial reporting purposes.

Consolidated Balance Sheet

A financial statement that aggregates the financial position of a parent company and its subsidiaries, presenting the assets, liabilities, and equity of the entire group as if it were a single entity.