Question

Hull Company acquires land for $86,000 cash. Additional costs are as follows:

Removal of shed
$300

Filling and grading
1,500

Salvage value of lumber of shed
120

Broker commission
1,130

Paving of parking lot
10,000

Closing costs
560


Hull will record the acquisition cost of the land as


$86,000.


$89,610.


$89,370.


$87,690

Answer 1

It will be recorded as $86000. The rest will simply be recorded as expenses.