Question

Question 1) Anson Company acquired real estate, on which it planned to construct a small office building, by paying $88,800 in cash. An old warehouse on the property was demolished at a cost of $8,888; the salvaged materials were sold for $1,777. Additional expenditures before construction began included $1,009 attorney’s fee for work concerning the land purchase, $5,200 real estate broker’s fee, $9,100 architect’s fee, and $14,000 to put in driveways and a parking lot. Instructions: A) Determine the amount to be reported as the cost of the land. B) For each cost not used in part (a), indicate the account to be debited.

Answer 1