Wilson Co. purchased land as a factory site for $600,000. Wilson paid $60,000 to

Question

Wilson Co. purchased land as a factory site for $600,000. Wilson paid $60,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title investigation and making the purchase. Architect's fees were $31,200. Title insurance cost $2,400, and liability insurance during construction cost $2,600. Excavation cost $10,440. The contractor was paid $2,200,000. An assessment made by the city for pavement was $6,400. Interest costs during construction were $170,000.

The cost of the land that should be recorded by Wilson Co. is
a. $660,480.
b. $666,880.
c. $669,880.
d. $676,280.

Explanation / Answer

Wilson Co. purchased land as a factory site for
Cost $600,000
Tear down $60,000
Salvage ($5,400)
Legal fees $3,480
Title insurance $2,400
pavement $6,400
Total $666,880

The cost of the land that should be recorded by Wilson Co. is

b. $666,880.

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