Pawtucket Furniture purchased land, paying $85,000 cash plus a $270,000 note pay

Question

Pawtucket Furniture purchased land, paying $85,000 cash plus a $270,000 note payable. In addition, Pawtucket paid delinquent property tax of $4,500, title insurance costing $3,500, and $9,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $53,000 for a fence around the property, $18,000 for a sign near the entrance, and $7,000 for special lighting of the grounds.

The cost of the land is $_____.

The cost of land improvements is $____.

The cost of the building is $_____.

Explanation / Answer

Cost of Land $ Purchase price (85000+270000) 355000 Property Tax 4500 Title Insurance 3500 Level & Remove 9000 Total cost of Land 372000 Ans Cost of Building $400000 Ans Cost of Land Improvement Fence 53000 Sign 18000 Special Lightining 7000 Cost of Land Improvement 78000 Ans

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