Question

On July 1, 2021, Larkin Co. purchased a $460,000 tract of land that is intended to be the site of a new office complex. Larkin incurred additional costs and realized salvage proceeds during 2021 as follows: Demolition of existing building on site $ 71,000 Legal and other fees to close escrow 12,900 Proceeds from sale of demolition scrap 8,600 What would be the balance in the land account as of December 31, 2021

Answer 1

Answer:

$75,300

Explanation:

The computation of the balance in the land is shown below;

Purchase cost

$460,000

Add:

Demolition of existing building on site

$71,000

Add:

Legal and other fees to close escrow

$12,900

Less:

Proceeds from the sale of demolition scrap

($8,600)

Balance in the land

$75,300

Therefore, balance in the land account as of December 31, 2021 is $75,300