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Seiler Co Purchased 6,000,000

Seiler Co. purchased land for $600,000 and incurred additional costs of demolishing existing buildings, legal and insurance fees, excavation, and city assessments to prepare the land for construction of a new factory building. These direct land acquisition and preparation costs totaled $666,880.

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699 views1 page

Seiler Co Purchased 6,000,000

Seiler Co. purchased land for $600,000 and incurred additional costs of demolishing existing buildings, legal and insurance fees, excavation, and city assessments to prepare the land for construction of a new factory building. These direct land acquisition and preparation costs totaled $666,880.

Uploaded by

Zes O
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Seiler Co. purchased land as a factory site for $600,000.

Seiler paid $60,000 to tear down two


buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title
investigation and making the purchase. Architect's fees were $31,200. Title insurance cost
$2,400, and liability insurance during construction cost $2,600. Excavation cost $10,440. The
contractor was paid $2,200,000. An assessment made by the city for pavement was $6,400.
Interest costs during construction were $170,000.
The cost of the land that should be recorded by Seiler Co. is
a. $660,480.
b. $666,880.
c. $669,880.
d. $676,280.
Land costs are: Purchase value, demolition value minus salvage value, legal fees, title insurance
cost, and assessment for pavement. These values once added: (600,000 + 60,000 - 5,400 + 3,480
+ 2,400 + 6,400) give 666,880.

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