Question

These expenditures were incurred by Carla Vista Co. in purchasing land: cash price $61,440, accrued taxes $4,720, attorney’s fees $2,660, real estate broker’s commission $3,360, and clearing and grading $4,060. What is the cost of the land? The cost of the land $

Answer 1

Answer:

Cost of land = $76,240

Explanation:

Cost of land = cash price + accrued taxes + attorney's fees + broker's commission + clearing and grading

Cost of land = $61,440 + $4,720 + $2,660 + $3,360 + $4,060

Cost of land = $76,240

• Original cost is the total price associated with the purchase of an asset.
• The original cost of an asset takes into consideration all of the items that can be attributed to its purchase and to putting the asset to use.
• These costs include the purchase price and such factors as commissions, transportation, appraisals, warranties and installation and testing.
• Original cost can be used to value an asset type, including equipment, real estate and security instruments.