Question

Capital construction purchased a 3-acre tract of land for a building site for $350,000. the company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. the cost of title insurance was $900 and attorney fees for reviewing the contract was $500. property taxes paid were $3,000, of which $250 covered the period after the purchase date. the capitalized cost of the land is:

Answer 1

$364,650. Purchase price $350,000Demolition costs of old building 12,000
Less building scrap sold (1,500)
Title insurance 900
Legal fees 500
Property taxes ($3,000 less taxes after the purchase date of $250) 2,750
Total cost of land $364,650