Able Corporation purchased land as a factory site and contracted with Ready Construction to construct a factory. Able made the following expenditures related to the acquisition of the land, building, and machinery to equip the factory:
Purchase price of the land 1,400,000
Demolition and removal of old building
Clearing and grading the land before construction
Various closing costs in connection with acquiring the land
Architect's fee for the plans for the new building
Payments to LuLu for building construction
Freight charges on machinery
Trees, plants, and other landscaping
Installation of a sprinkler system for the landscaping
Cost to build special platforms and install wiring for the machinery
Cost of trial runs to ensure proper installation of the machinery
Fire and theft insurance on the factory for the first year of use
In addition to the above expenditures, Able purchased four forklifts from Fleet Street. In payment, Able paid $18,000 cash and signed an interest-bearing note requiring the payment of $50,000 at the end of one year. An interest rate of 8% properly reflects the time value of money for this type of loan.
Determine the acquisition costs of each of the assets Able acquired in the above transactions for land, building, machinery, land improvements, forklifts, and prepaid insurance. You must show the details of each category to receive credit.