On March 1, 2017, Ivanhoe Company acquired real estate, on which it planned to construct a small...

Question:

On March 1, 2017, Ivanhoe Company acquired real estate, on which it planned to construct a small office building, by paying $76,500 in cash. An old warehouse on the property was demolished at a cost of $7,500; the salvaged materials were sold for $1,560. Additional expenditures before construction began included $1,060 attorney's fee for work concerning the land purchase, $4,150 real estate broker's fee, $8,560 architect's fee, and $13,300 to put in driveways and a parking lot.

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

Property, Plant & Equipment:

The Property, plant, and equipment are the fixed assets of the firm which cannot be liquidated within 12 twelve months or an operating cycle period whichever is longer. It includes land, machinery, furniture, and so on.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

{eq}\begin{align*}{\rm\text{Cost}}\,{\rm\text{of}}\,{\rm\text{Land}}&= {\rm\text{Purchase}}\,{\rm\text{price}} +...

See full answer below.


Learn more about this topic:

Loading...
Acquisition of Property, Plant & Equipment

from

Chapter 9 / Lesson 4
6.8K

One of the main categories of long-term assets is known as property, plant, and equipment, encompassing the location, buildings, and equipment needed in production. Learn how the acquisition of property, plant, and equipment is recorded and documented through an example of journaling.


Related to this Question

Explore our homework questions and answers library