On January 6. Year 1, the Mount Jackson Corporation purchased a tract of land for a factory site for $765.000. An existing building on the site was demolished and the new factory was completed on October 11, Year 1. Additional cost data are shown below:
Construction cost of a new building $904,000
Real estate and attorney fees $9,800
Architect fees $72,000
Cost of demolishing an old building $68,700
Salvage recovery from old building ($7,000)
Which of the following correctly states the capitalized cost of the (a) land and (b) the new building, respectively?
a) $836,500 and 976,000
b) $765,000 and $1,047,500
c) $774,800 and $1,037,700
d) $843,500 and $969,000