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Homework answers / question archive / Coronado Company purchased land for $80,000

Coronado Company purchased land for $80,000

Accounting

Coronado Company purchased land for $80,000. The company also paid $12,000 in accrued taxes on the property, incurred $5,000 to remove an old building, and received $2,000 from the salvage of the old building. The land will be recorded at:

a. $80,000.

b. $92,000.

c.   $83,000.

d. $95,000

 

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Answer:

d .

Step-by-Step explanation

The value of land is calculated as follows:

Value of land = Purchase price + Accrued taxes + Cost to remove old building - Cash received from salvage

= $80,000 + $12,000 + $5,000 - $2,000

= $95,000

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