Grannis Corporation purchased land adjacent to its plant to improve access for t

ID: 2553772 • Letter: G

Question

Grannis Corporation purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred by the company were as follows: purchase price, $40,000; broker's fees, $7,000; title search and other fees, $6,000; demolition of an old building on the property, $3,700; grading, $1,200; digging foundation for the road, $3,000; laying and paving driveway, $25,000; lighting, $7,500; signs, $1,500. List the items and the amounts that should be included in the Land account.

Explanation / Answer

Answer:

Purchase price

$40,000

Broker’s fees

7,000

Title search and other fees

6,000

Demolition of old building

3,700

Grading

1,200

Land acquisition cost

$57,900

So cost of land is $57900