A company purchased land for $350,000 cash.The real estate brokers' commission was $25,000 and $35,000 was spent for demolishing an old building on the land before construction of a new building could start.Under the historical cost principle, the cost of land is

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The historical cost principle requires all costs necessary to acquire an asset and prepare it for its intended use to be included in the asset's cost. Therefore, the cost of the land includes the purchase price ($350,000), the broker's commission ($25,000), and the cost of demolishing the old building ($35,000), totaling $410,000.

A Company Purchased Land for $350,000 Cash