On March 1, 2017, Cullumber Company acquired real estate, on which it planned to

Question

On March 1, 2017, Cullumber Company acquired real estate, on which it planned to construct a small office building, by paying $87,000 in cash. An old warehouse orn the property was demolished at a cost of $9,600; the salvaged materials were sold for $1,980. Additional expenditures before construction began included $1,480 attorney's fee for work concerning the land purchase, $5,200 real estate broker's fee, $8,980 architect's fee, and $15,400 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land Cost of land

Explanation / Answer

Amount to be reported as cost of land:-

Cash Paid $87000

Wraehouse demolished(9600-1980) $7620

Attorney's fee $1480

Real estate Broker's fee $5200

Architect's fee $8980

Total cost of land $110280

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