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Homework answers / question archive / Massey Corporation purchased a piece of land for $50,000

Massey Corporation purchased a piece of land for $50,000

Accounting

Massey Corporation purchased a piece of land for $50,000. It paid attorney's fees of $5,000 and brokers' commissions of $4,000. An old building on the land was torn down at a cost of $2,000, and proceeds from the scrap were $500. The total to be debited to the Land account is:

a. $50,000

b. $61,000

c.   $60,500

d. $59,000

 

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Answer:

c .

Step-by-Step explanation

The total amount debited to land account is calculated as follows:

value of land = Purchase price + Attorney fees + Brokers commission + Cost of torn down - Sale of scrap

= $50,000 + $5,000 + $4,000 + $2,000 - $500

= $60,500

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