RECOMMENDED!!ABC Co. purchased land that had an existing

  

ABC Co. purchased land that had an existing building on it for $400,000. Legal fees of $1,850 were paid to write the purchase contract.ABC purchased the land with the intent of building a new building (factory) on the land. The process of tearing down the existing building and constructing the new building will take 6 months.ABC paid $42,000 to demolish the old building and sold the salvaged lumber and brick for $6,300.ABC paid $2,200 to XYZ contracting company for a land survey and $68,000 for drawing the blueprints for the new building. The land survey was necessary so that factory plans (blueprints) could be drawn.The contractor’s charge for construction of the new building was $2,740,000. Interest costs of $170,000 were incurred to finance the construction of the building (assume this entire amount is eligible to be capitalized as part of the building cost).1- What is the total cost of the Land that ABC Co. would record on their balance sheet?2- What is the total cost of the new building (factory) that ABC Co. would record on their balance sheet?