Dale\'s business services purchased land in January of Year XXX1 at a cost of $3

Question

Dale's business services purchased land in January of Year XXX1 at a cost of $350,000. His company paid sales tax and transfer document cost of $2,500. Further, the cost of removal of an old building (which was not in a usable condition) on that land was $10,000. In November of Year XXX3, an appraiser estimated the value of land to be $450,000. A similar lot of land in the same neighborhood sold for $500,000 in December of Year XXX2. At what value should Dale represent the land in the balance sheet to be prepared at the end of Year XXX3?

Explanation / Answer

Land to be reported in the balance sheet at the end of Year XXX3 = 350000+2500+10000= $362500

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