Question

Renn Company acquires land for $56,000 cash. Additional costs are as follows:

Removal of shed $ 300
Filling and grading 1, 500
Salvage value of lumber of shed 120
Broker commission 1, 130
Paving of parking lot 10,000
Closing costs 560
Renn will record the acquisition cost of the land as:____________.
A) $56,000.
B) $57, 690.
C) $59, 610.
D) $59, 370.

Answer 1

D) $59, 370.

Step-by-step explanation:

Calculation for how much Renn will record the

acquisition cost of the land

Cash$56,000

Removal of shed $ 300

Filling and grading 1, 500

Less Salvage value of lumber of shed (120)

Broker commission 1, 130

Closing costs 560

Acquisition cost of Land $59,370

Therefore Renn will record the acquisition cost of the land as:$59, 370