On February 1, 2014, Nelson Corporation purchased a parcel of land as a factory site for $280,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2014. Costs incurred during this period are listed below: Demolition of old building $20,000
Architect's fees 35,000
Legal fees for title investigation and purchase contract 5,000
Construction costs 1,340,000
(Salvaged materials resulting from demolition were sold for $10,000.)
Nelson should record the cost of the land and new building, respectively, as:.
a. $305,000 and $1,365,000.
b. $290,000 and $1,380,000.
c. $290,000 and $1,375,000.
d. $295,000 and $1,375,000.

d. The cost of land and building is $295,000 and $1,375,000 respectively

Explanation:

Cost of land = Purchase price + Price for demolishing old building + Legal fee on  purchase contract & investigation - Salvage value of demolished  material

Cost of land = $280,000 + $20,000 + $5,000 - $10,000

Cost of land = $305,000−$10,000

Cost of land = $295,000

Cost of building = Construction cost + Architect′ s fee

= $1,340,000 + $35,000

= $1,375,000

one of the disadvantages of getting a government sponsored mortgage is they put a limit on the purchase price of the house. because the government is in charge of the mortage loan and terms, they are able to control how much money they are allowing someone to take out for the loan. not only are they incontrol, it's a lengthy process for a government sponsored mortgage.

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