Question

Bonita Company acquires land for $86900 cash. Additional costs are as follows:

Removal of shed	$ 300
Filling and grading	1500
Salvage value of lumber of shed	120
Broker commission	1100
Paving of parking lot	10000
Closing costs	510

Bonita will record the acquisition cost of the land as

$90190.

$90430.

$96900.

$88510.

Answer 1

A B 1Cost of Land: 2 Purchase cost $86,900 3 Add: Removal of shed $300 4 Add: Filling and grading $1,500 5 Less: Salvage vahie of lumber of shed 6 Add: Broker commission ($120) $1,100 7 Add: Closing costs 8 Acquisition cost of the land 9 Thus, the correct option is '$90,190' $510 $90,190 Paving of parking lot is a land improvement cost