Morgan Industries purchases land for a building site for $500,000, payed $20,000 to have an existing structure removed and recovered $4,000 from the sale of salvaged materials. The cost charge to the land account is $524,000.
$500,000 + 20,000 - 4,000 = $516,000

Question

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The cost charged to the land account should be $516,000, which includes the purchase price, the cost of removing the structure, and subtracts the recovered amount from salvaged materials.

Morgan Industries Purchases Land for a Building Site for $500,000