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5 November, 20:16

On March 1, 2017, Carla Vista Co. acquired real estate, on which it planned to construct a small office building, by paying $84,500 in cash. An old warehouse on the property was demolished at a cost of $9,100; the salvaged materials were sold for $1,880. Additional expenditures before construction began included $1,380 attorney's fee for work concerning the land purchase, $4,950 real estate broker's fee, $8,880 architect's fee, and $14,900 to put in driveways and a parking lot. Determine the amount to be reported as the cost of the land.

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  1. 5 November, 21:24
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    Land 112,980

    Explanation:

    The driveway and parking lot are not part of the land. That is a decision of the company and will be applied on a diferent account, Parking lot

    All the other cost are required to acquire the land and leave the land ready to use.

    The salvage for the demolition decrease the cost for the land.

    Purchase 84,500

    demolition 9,100

    salvaged materials (1,880)

    atorney's fee 1,380

    broker's fee 4,980

    architect's fee 14,900

    Total 112,980
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