Question

On July 1, 2021, Larkin Co. purchased a $430,000 tract of land that is intended to be the site of a new office complex. Larkin incurred additional costs and realized salvage proceeds during 2021 as follows: Demolition of existing building on site $ 69,000 Legal and other fees to close escrow 12,400 Proceeds from sale of demolition scrap 8,900 What would be the balance in the land account as of December 31, 2021

Answer 1

Balance in the land $72,500

Step-by-step explanation:

The computation of the balance in the land account is as follows;

Purchase cost $430,000

Add: Demolition of existing building on site $69,000

Add: Legal and other fees to close escrow $12,400

Less: Proceeds from the sale of demolition scrap -$8,900

Balance in the land $72,500

We simply applied the above formula so that the correct value could come

And, the same is to be considered