A company acquired some land for $75,000 to construct a new office complex.Legal fees paid were $2,750, delinquent taxes assumed were $3,250, and $6,350 was paid to remove an old building.Materials salvaged from the demolition of the building were sold for $2,300.Determine the cost of the land to be reported on the balance sheet.
A) $85,050
B) $89,650
C) $84,100
D) $87,350

Question

Quizplus · Accepted Answer

The cost of the land includes the purchase price, legal fees, delinquent taxes, and costs to prepare the land for its intended use, minus any proceeds from selling salvaged materials. Therefore, the total cost is $75,000 (purchase price) + $2,750 (legal fees) + $3,250 (delinquent taxes) + $6,350 (removal of old building) - $2,300 (proceeds from salvage) = $85,050.

A Company Acquired Some Land for $75,000 to Construct a New