Question

Angus Corp. acquires land for $105,000 cash. Additional costs are as follows:

Removal of shed	$ 500
Filling and grading	3,200
Residual value of lumber from shed	150
Paving of parking lot	16,000
Closing costs	1,350

Angus will record the cost of the land as

Answer 1

Cost of the land = $109,900

Explanation

Cost of Land
	$	$
Cost of purchases of land		105,000.00
Add:
Removal of shed	500.00
Filling and grading	3,200.00
Closing costs	1,350.00	5,050.00
		110,050.00
Less: Residual value of lumber from shed		(150.00)
Total cost of land		109,900.00