Vijay Inc. purchased a three-acre tract of land for a building site for $270,000

Question

Vijay Inc. purchased a three-acre tract of land for a building site for $270,000. On the land was a building with an appraised value of $115,000. The company demolished the old building at a cost of $11,700, but was able to sell scrap from the building for $1,630. The cost of title insurance was $920 and attorney fees for reviewing the contract were $590. Property taxes paid were $3,000, of which $240 covered the period subsequent to the purchase date. The capitalized cost of the land is:Vijay Inc. purchased a three-acre tract of land for a building site for $270,000. On the land was a building with an appraised value of $115,000. The company demolished the old building at a cost of $11,700, but was able to sell scrap from the building for $1,630. The cost of title insurance was $920 and attorney fees for reviewing the contract were $590. Property taxes paid were $3,000, of which $240 covered the period subsequent to the purchase date. The capitalized cost of the land is:

Explanation / Answer

Vijay Inc. Capitalized cost of Land Details Amt $ Purchase cost of Land            270,000 Cost of building demolition               11,700 Less Scrap value recovered               (1,630) Title Insurance                     920 Attorney fees for contract review                     590 Property Tax related to period before purchase                 2,760 Total Capitalized Cost of Land $        284,340

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