Question

Land is purchased for $ 100,000. Back taxes paid by the purchaser were $ 7,800​; total costs to demolish an existing building were $ 8,000 and the cost to clear the land was $ 20,000. The cost of paving the parking lot was $ 7,500. The cost of land is​ ________ and the cost of land improvements is​ ________.

Answer 1

Answer:

The total cost of land is $107,800, and the total cost of land improvement is $35,500.

Explanation:

This solution is obtained considering that the cost of land is the amount paid for the property.  But since the taxes should also be paid to own it, this amount must be added to the total cost.  It is a cost related to the purchase itself.  This will be a total of 100,000 + 7,800.

On the other side, the rest of the costs are related to improvements on the property, and not to own it (demolishing, clearing, paving).  This is a total cost of 8,000 + 20,000 + 7,500.