On March 1, 2014, Zobrist Company acquired real estate, on which it planned to c

Question

On March 1, 2014, Zobrist Company acquired real estate, on which it planned to construct a small office building, by paying $87,850 in cash. An old warehouse on the property was demolished at a cost of $7,330; the salvaged materials were sold for $1,520. Additional expenditures before construction began included $1,350 attorney's fee for work concerning the land purchase, $4,750 real estate broker's fee, $9,360 architect's fee, and $14,020 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land.

Explanation / Answer

Cost of land=

* Below are not land cost.

Mar 1,2014 Cash $87,850.00 Land A/C Add Demolished cost $ 7,330.00 Land A/C Less Salvage Value $ (1,520.00) Land A/C Add Attorney Fees $ 1,350.00 Land A/C Add Broker Fee $ 4,750.00 Land A/C $99,760.00

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