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Juliette [100K]
3 years ago
13

Fresh Veggies, Inc. (FVI), purchases land and a warehouse for $520,000. In addition to the purchase price, FVI makes the followi

ng expenditures related to the acquisition: broker's commission, $32,000; title insurance, $2,200; and miscellaneous closing costs, $6,400. The warehouse is immediately demolished at a cost of $32,000 in anticipation of building a new warehouse. Determine the amount FVI should record as the cost of the land.
Business
2 answers:
user100 [1]3 years ago
6 0

Answer: $519,000

Explanation:

Purchase Price 460000

Add Broker's Commission 26000

Add Title Insurance 1600

Add Misc .Closing Cost 5400

Add Warehouse demolistion cost 26000

Cost of Land 519000

Vilka [71]3 years ago
6 0

Answer:

The amount FVI should record as the cost of the land=$592,600

Explanation:

Given Data:

Land cost=$520,000

broker's commission=$32,000

title insurance=$2,200

Miscellaneous closing costs=$6,400

Demolition cost=$32,000

Required:

The amount FVI should record as the cost of the land=?

Solution:

Total Cost=Land cost+broker's commission+title insurance+ Miscellaneous closing costs+Demolition cost

Total Cost=$520,000+$32,000+$2,200+$6,400+$32,000

Total cost=$592,600

The amount FVI should record as the cost of the land=$592,600

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