Exercise 9-3 On March 1, 2012, Enrique Company acquired real estate, on which it planned to construct a small office building, by paying $82,080 in cash. An old warehouse on the property was demolished at a cost of $8,510; the salvaged materials were sold for $1,770. Additional expenditures before construction began included $1,330 attorney’s fee for work concerning the land purchase, $5,340 real estate broker’s fee, $9,380 architect’s fee, and $13,680 to put in driveways and a parking lot. a. Determine the amount to be reported as the cost of the land.

Exercise 9-3

On March 1, 2012, Enrique Company acquired real estate, on which it planned to construct a small office building, by paying $82,080 in cash. An old warehouse on the property was demolished at a cost of $8,510; the salvaged materials were sold for $1,770. Additional expenditures before construction began included $1,330 attorney’s fee for work concerning the land purchase, $5,340 real estate broker’s fee, $9,380 architect’s fee, and $13,680 to put in driveways and a parking lot.

 

a.       Determine the amount to be reported as the cost of the land.

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