Question

On July 1, 2018, Larkin Co. purchased a $530,000 tract of land that is intended to be the site of a new office complex. Larkin incurred additional costs and realized salvage proceeds during 2018 as follows:

Demolition of existing building on site $71,000
Legal and other fees to close escrow 12,400
Proceeds from sale of demolition scrap 9,900

What would be the balance in the land account as of December 31, 2013?

Answer 1

$603,500

Step-by-step explanation:

Larkin Co.

Purchase cost = $530,000

Add: Demolition of existing building on site = $71,000

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

Less: Proceeds from sale of demolition scrap = $9,900

Balance of the land account = $603,500