Question

Brief Exercise 228 Farley Corporation purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: purchase price, $70,000; broker’s fees, $6,000; title search and other fees, $5,000; demolition of an old building on the property, $5,700; grading, $1,200; digging foundation for the road, $3,000; laying and paving driveway, $25,000; lighting $7,500; signs, $1,500.List the items and amounts that should be included in the Land account.

Answer 1

Answer:

$87,900

Explanation:.

Calculation to List the items and amounts that should be included in the Land account

Purchase price $70,000

Broker’s fees $6,000

Title search and other fees $5,000

Demolition of old building $5,700

Grading $1,200

Land acquisition cost $87,900

($70,000+$6,000+$5,000+$5,700+$1,200)

Therefore the amounts that should be included in the Land account will be $87,900