Question

These expenditures were incurred by Sheffield Corp. in purchasing land: cash price $86,000, assumed accrued taxes $3,200, attorney’s fees $2,600, real estate broker’s commission $1,800, and clearing and grading $5,700. What is the cost of the land?

Answer 1

Answer: $‭99,300‬

Explanation:

The cost of the land includes the actual purchase price and every expense incurred to get it ready for use.

These include;

= Cash price + Accrued taxes + Attorney fees + Real estate broker’s commission + clearing and grading

= 86,000 + 3,200 + 2,600 + 1,800 + 5,700

= $‭99,300‬