Constructed Assets LO 6 Kieu Corporation constructs a new wa

Constructed Assets (LO. 6) Kieu Corporation constructs a new warehouse. It pays $100,0 materials and $70,000 to the general contractor. Architectural fees total $18,000. The corporation pays $13,000 in intere stn its loan to finance construction. The land costs $15,000, and the real estate taxes paid on the land during construction amount to $1.000 Kieu\'s initial basis in the warehouse is s 00 for

Solution

Direct materials cost $100,000 Direct contractor costs $70,000 Architectural fees $18,000 Interest on the construction loan $13,000 Initial basis of the warehouse building $201,000