A company purchased land for $ 70,000 cash. $ 7,000 was spent demolishing an old building on the land before construction of a new building could start. The cost of land would be recorded at

Question

Quizplus · Accepted Answer

The cost of land includes all expenditures made to acquire the land and prepare it for its intended use. This includes the purchase price and costs to demolish an old building. Therefore, the cost of the land would be recorded at $70,000 + $7,000 = $77,000.

A Company Purchased Land for $ 70,000 Cash