10. Grannis Corporation purchasod land adjacent to its plant to improve access i

Question

10. Grannis Corporation purchasod land adjacent to its plant to improve access incurred by the company were as follows: purchase price, $40,000; broker's fecs, $7,000, title scarch and other fees, $6,000; demolition of an old building on the property, $3,700; grading, $1,200, digging toundation 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. List the items and the amounts that should be included in the Land Improvement account Land: Land Improvement:

Explanation / Answer

Land:

Purchase price = 40000

Title search and other fees = 6000

Broker’s fee = 7000

Demolition cost = 3700

Total cost of land = 40000+6000+7000+3700 = 56700

Land Improvement:

Grading = 1200

Digging foundation for road = 3000

Laying and paving driveway = 25000

Lighting = 7500

Signs = 1500

Land improvement cost = 1200+3000+25000+7500+1500 = 38200

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