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15 September, 08:43

On March 1, 2022, Blossom Company acquired real estate, on which it planned to construct a small office building, by paying $86,000 in cash. An old warehouse on the property was demolished at a cost of $9,400; the salvaged materials were sold for $1,940. Additional expenditures before construction began included $1,440 attorney's fee for work concerning the land purchase, $5,100 real estate broker's fee, $8,940 architect's fee, and $15,200 to put in driveways and a parking lot.

Required:

(a) Determine the amount to be reported as the cost of the land.

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Answers (2)
  1. 15 September, 09:17
    0
    Cost of The Land = $86,000 + $9,400 - $1,940 + $1,440 + $5,100

    = $100,000

    Therefore, Cost of The Land is $100,000.

    Explanation:

    cost of constructing the building = $86,000

    cost of demolishing old warehouse = $9,400

    cost of salvaged materials = $1,440

    Additional expenditures:

    Attorney's fee = $5,100

    Architects's fee = $8,940

    Driveways and parking lot fee = $15,200
  2. 15 September, 12:23
    0
    Cost of The Land = $86,000 + $9,400 - $1,940 + $1,440 + $5,100

    = $100,000

    $100,000.

    Explanation:

    cost of constructing the building = $86,000

    cost of demolishing old warehouse = $9,400

    cost of salvaged materials = $1,440

    Additional expenditures:

    Attorney's fee = $5,100

    Architects's fee = $8,940

    Driveways and parking lot fee = $15,200
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