Question

Shannon Company acquires land with a shed on it to use as a plant site for $56,000. Additional information is as follows:

Removal of shed                                                  $     300

Filling and Grading 1,500

Proceeds from selling shed lumber 120

Broker commission 1,130

Paving of parking lot 10,000

Closing costs 560

Shannon will record the acquisition cost of the land as

Answer 1

Cost of Land = $59,370

($56,000 + 1,500 + 1,130 + 560 + 300 – 120)

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