Question

A company purchased a 3-acre tract of land for a building site for $440,000. The company demolished the old building at a cost of $21,000, but was able to sell scrap from the building for $2,400. The cost of title transfer was $1,350 and attorney fees for reviewing the contract was $680. Property taxes paid were $7,500, of which $700 covered the period after the purchase date. The capitalized cost of the land is:

Answer 1

$467,430

Step-by-step explanation:

Calculation for The capitalized cost of the land is:

Purchase price $440,000

Demolition costs $21,000

Scrap sold ($2,400)

Title insurance $1,350

Legal fees $680

Property taxes ($7,500 – $700) $6,800

Total cost of land $467,430

Therefore The capitalized cost of the land is:$467,430