Question

5 points Save Answ Vijay Inc purchased a three-acre tract of land for a building site for $410,000. On the land was a building with an appraised value of $130.000. The company demolished the old building at a cost of $11.900, but was able to sell scrap from the building for $1600. The cost of title insurance was 5930 and attorney fees for reviewing the contract were 5500 Property taxes paid were $3000, of which $350 covered the period subsequent to the purchase date. The capitalized cost of the land is 5425.980 $281280 5424 380 $426 330

Answer 1

answer: $424,380

Explanation:-

The capitalized cost of the three acre land lot includes:

$410,000 purchasing cost of the lot
$11,900 demolition costs
$930 cost of title insurance
$500 attorney fees
$2,650 property taxes ($3,000 - $350)
revenue of $1,600 from selling scrap
Total capitalized cost =$410,000+$11,900 + $930 + $500 + $2,650 - $1,600

Total capitalized cost is $424,380