Question

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?

Answer 1

Cost of land= 564,500

Step-by-step explanation:

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

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

= 564,500