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1 July, 22:43

Fresh Veggies, Inc. (FVI), purchases land and a warehouse for $520,000. In addition to the purchase price, FVI makes the following expenditures related to the acquisition: broker's commission, $32,000; title insurance, $2,200; and miscellaneous closing costs, $6,400. The warehouse is immediately demolished at a cost of $32,000 in anticipation of building a new warehouse. Determine the amount FVI should record as the cost of the land.

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  1. 1 July, 23:07
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    Answer: $519,000

    Explanation:

    Purchase Price 460000

    Add Broker's Commission 26000

    Add Title Insurance 1600

    Add Misc. Closing Cost 5400

    Add Warehouse demolistion cost 26000

    Cost of Land 519000
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