On March 1, 1998, Roy Orbis Company acquired real estate, on which it planned to construct a
Question:
On March 1, 1998, Roy Orbis Company acquired real estate, on which it planned to construct a small office building, by paying \(\$ 100,000\) in cash. An old warehouse on the property was razed at a cost of \(\$ 6,600\); the salvaged materials were sold for \(\$ 1,700\). Additional expenditures before construction began included \(\$ 1,100\) attorney's fee for work concerning the land purchase, \(\$ 4,000\) real estate broker's fee, \(\$ 7,800\) architect's fee, and \(\$ 14,000\) to put in driveways and a parking lot.
\section*{Instructions}
(a) Determine the amount to be reported as the cost of the land.
(b) For each cost not used in part (a), indicate the account to be debited.
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9780471169192
1st Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso