Question

On March 1, 2022, Wildhorse Company acquired real estate, on which it planned to construct a small office building, by paying $90,000 in cash. An old warehouse on the property was demolished at a cost of $8,400; the salvaged materials were sold for $4,500. Additional expenditures before construction began included $2,700 attorney's fee for work concerning the land purchase, $6,800 real estate broker's fee, $10,600 architect's fee, and $19,300 to put in driveways and a parking lot.

1) For each cost not used in previous part, indicate the account to be debited.

Answer 1

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Wildhorse Company	Amount $	Account to be debited/ credited
Purchase price	90,000.00	Land
Add:
Additional expenditures	2,700.00	Land
Attorney's fees	2,700.00	Land
Payment for demolition of old building on land	8,400.00	Land
Real estate broker's fee	6,800.00	Land
Architect's fee	10,600.00	Land
Laying and paving driveway	19,300.00	Land
Less:
Salvaged materials sold	4,500.00	Land
Cost of land	136,000.00