Question

Eagle Country Club has acquired a lot to construct a clubhouse. Eagle had the following costs related to the construction:

Architects' fees: $45,000
Construction labor: $80,000
Engineers' fees: $15,000
Fences around the building: $9,000
Grading and leveling: $10,000
Insurance costs incurred during construction: $7,000
Interest on money borrowed for construction: $5,000
Land: $73,000
Building materials: $237,000
Sales taxes: $6,000
Trees and shrubs: $6,000
Determine the cost of the Club House to be reported on the balance sheet.

a) $392,000
b) $423,000
c) $474,000
d) $639,000

Answer 1

The cost of the Club House to be reported on the balance sheet is $474,000.

Step-by-step explanation:

To determine the cost of the Club House to be reported on the balance sheet, we need to add up all the costs related to the construction. These costs include architects' fees, construction labor, engineers' fees, fences around the building, grading and leveling, insurance costs, interest on money borrowed for construction, land, building materials, sales taxes, trees and shrubs. By adding up all these costs, we get a total of $474,000. Therefore, the correct answer is option c) $474,000.