On March 1 2014 Zobrist Company acquired real estate on whic

On March 1, 2014, Zobrist Company acquired real estate, on which it planned to construct a small office building, by paying $90,610 in cash. An old warehouse on the property was demolished at a cost of $8,980; the salvaged materials were sold for $1,720. Additional expenditures before construction began included $1,590 attorney’s fee for work concerning the land purchase, $4,040 real estate broker’s fee, $9,320 architect’s fee, and $13,790 to put in driveways and a parking lot.

Determine the amount to be reported as the cost of the land

Solution

90,610 and attorney fee and real estate broker fee are included in cost of land. other amounts are not related to land so they are not cost of land(they are investment in building other properties).