A company incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building:

Purchase price of the land $ 620,000

Sale of salvaged parts already on land $ 20,000

Demolition of the old building $ 20,000

Ground-breaking ceremony (food and supplies) $ 2,800

Land preparation and leveling $ 7,000

What amount should be recorded for the purchase of the land?

Multiple Choice

$647,000.

$627,000.

$649,800.

$629,800.

Question

Babbles

Business

6 October, 10:50

A company incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building:

Purchase price of the land $ 620,000

Sale of salvaged parts already on land $ 20,000

Demolition of the old building $ 20,000

Ground-breaking ceremony (food and supplies) $ 2,800

Land preparation and leveling $ 7,000

What amount should be recorded for the purchase of the land?

Multiple Choice

$647,000.

$627,000.

$649,800.

$629,800.

+1

Answers (1)

Know the Answer?

Zayne Hughes · Answer 1

Option (B) is correct.

Explanation:

Given that,

Purchase price of the land = $620,000

Sale of salvaged parts already on land = $20,000

Demolition of the old building = $20,000

Ground-breaking ceremony (food and supplies) = $2,800

Land preparation and leveling = $7,000

Cost of land:

= Purchase price - Salvage + Demolition cost + Land preparation

= $620,000 - $20,000 + $20,000 + $7,000

= $627,000