Question

Bordewick, Inc. purchased land and incurred the following costs: Purchase price $500,000, Clearing and grading costs $50,000, Demolition costs on old building $12,500, Broker fees to execute purchase $10,000, Cost of a new parking lot $25,000. What is the cost recorded for the land account?

• A. $597,500
• B. $572,500
• C. $562,500
• D. $550,000

Answer 1

Initial Cost of land
Particulars	Amount
Purchase price	$        500,000
Demolition of old building	$           12,500
Legal Fees for title of investigation	$           10,000
Cleraing and grading cost	$           50,000
Total cost of land	$        572,500