Question

Previn Brothers Inc. purchased land at a price of $26300. Closing costs were $1300. An old building was removed at a cost of $10400. What amount should be recorded as the cost of the land?

Answer 1

Answer:

$38,000

Explanation:

The computation of the cost of the land is shown below:

= Purchase price of land + closing cost + removal cost of an old building

= $26,300 + $1,300 + $10,400

= $38,000

In order to find out the cost of the land, we simply added the purchase value of land, its closing cost and the removal cost of an old building