A company purchased land for $92,000 cash. The real estate brokers' commission was $7,500 and...
Question:
A company purchased land for $92,000 cash. The real estate brokers' commission was $7,500 and $8,000 was spent for demolishing an old building on the land before construction of a new building could start. Proceeds from the salvage of the demolished building were $1,500. Under the cost principle, what would the cost of the land be recorded as?
Fixed Assets:
Land is the only fixed asset that cannot be depreciated due to the fact that it does not have a determinable useful life. Land may be purchased with the plans of building an office on it but land should be tracked at a cost separately from the building for accounting purposes.
Answer and Explanation: 1
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View this answerAnswer: $106,000
Explanation:
This is calculated as:
{eq}\begin{align} \text{Cost of Land} &= \text{Purchase price} + \text{Real estate fees} +...
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