Sparky, Co. purchased land as a factory site for $600,000. Sparky paid $60,000 t

Question

Sparky, Co. purchasedland as a factory site for $600,000. Sparky paid $60,000 to tear down two buildings on the land and was able to salvage some of the building materials which were sold for $5,400. Legal fees of $5,880 were paid for title insurance on the land purchase. Architect's fees were $32,200. There was an assessment by the city for a drainage project that cost $6,400. Excavation costs totaled $10,440. The contractor was paid $2,200,000 for the construction of the factory. Liability insurance during construction cost $12,600. Interest costs during construction were $170,000.

The historical cost of the Land that should be reported by Sparky is: ___________________________

*When recording your answer,do not use any dollar signs or commas. For example, if your answer is $567,500, record your answer as 567500.

Explanation / Answer

Ans:

Cost of Land = Purchase Value + Cost Incurred to Tear Down 2 Buildings - Salvage + Legal Fees + Title Insurance Cost + Assessement Cost

= 600000 + 60000 - 5400 + 5880 + 6400

= 666880

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