一、On January 1, 2007, George Solti Corporation purchased for $600,000 a tract of land (site number 101) wilh a building. Solti paid a real estate broker's commission of $36,000, legal fees of $6,000, and title guarantee insurance of $18,000. The closing stalemenl indicated that the land value was $500,000 and the building value was $100,000. Shortly after acquisition, ihe building was razed al a cost of $54,000. Solti entered into a $3,000,000 fixed-price contract with Slatkin Builders, Inc. on March 1 2007, for Ihe conslruclion of an office building on land site number 101. The building was completed ami occupied on Seplember 30, 2008. Additional consliuclion costs were incurred as follows.
Plans, specifications, and blueprints
30s000
Architects fees for design and supervision 70,000
The building is eslimated to have a 20-year life from dale of completion and will be deprecialed using llie 200% declining balance method. (If the scrap value is $100,000) Jnstntciions: (20 分）
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