A company incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building: Purchase price of the land $ 540,000 Sale of salvaged parts already on land $ 22,000 Demolition of the old building $ 39,000 Ground-breaking ceremony (food and supplies) $ 1,500 Land preparation and leveling $ 7,500 What amount should be recorded for the purchase of the land?

Question

Business

Pranav

13 February, 00:17

A company incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building: Purchase price of the land $ 540,000 Sale of salvaged parts already on land $ 22,000 Demolition of the old building $ 39,000 Ground-breaking ceremony (food and supplies) $ 1,500 Land preparation and leveling $ 7,500 What amount should be recorded for the purchase of the land?

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Answers (1)

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Toby Lara · Answer 1

Cost of land = 564,500

Explanation:

Cost of land = Purchase price - Salvage + Demolition cost + Land preparation

= 540,000 - 22,000 + 39,000 + 7,500

= 564,500