Answer:
$106,400
Explanation:
The cost of land includes the land itself, interventions related to the preparation of the land for its intended purpose, that do not depreciate, and any fees paid concerning specifically the acquisition of the land itself.
In this case, the following costs would be added to the cost of the land:
$94,000 paid for the land itself.
$9,300 paid for demolishing the warehouse (this is an intervention carried out to prepare the land for its intended use: constructing a building).
$3,100 paid to attorneys during the acquisition of the land.
Adding up these costs together we obtain the figure of $106,400. This is the total amount to be reported as the cost of the land.
The salvaged materials sold are not includd because they are obviously not part of the land.
The real estate broker's fee and the architect's fee are not included either because these fees are related to the building, not the land itself.
Finally, the driveway and parkway cost is not included either because, while land improvements, these are depreciable assets, and depreciable assets are not included in the cost of land, since land is considered to have permanent value, and thus, cannot be depreciated.
