On March 1, 2010, Edington Company acquired real estate, on which it planned to

ID: 2442512 • Letter: O

Question

On March 1, 2010, Edington Company acquired real estate, on which it planned to construct a small office building, by paying $96,328 in cash. An old warehouse on the property was demolished at a cost of $8,227; the salvaged materials were sold for $1,706. Additional expenditures before construction began included $1,218 attorney's fee for work concerning the land purchase, $4,310 real estate broker's fee, $9,690 architect's fee, and $13,536 to put in driveways and a parking lot.

Determine the amount to be reported as the cost of the land.

Explanation / Answer

Amount

land

$96,328

Demolished at a cost

$8,227

Less:-Salvaged materials were sold

$1,706

$6,521

Attorney's fee

$1,218

Real estate broker's fee

$4,310

The cost of the land

$108,377

Note :-