A Company Purchased Land on Which to Construct a New

question 156

Essay

A company purchased land on which to construct a new building for a cost of $250,000. Additional costs incurred were: $$\begin{array} { | l | r | } \hline \text { Real estate broker's commissions } & \$ 15,000 \\\hline \text { Legal fees incurred in purchase of the real estate } & 2,500 \\\hline \text { Landscaping } & 10,000 \\\hline \text { Expenses to remove old house located on land } & 3,000 \\\hline \text { Proceeds from selling materials salvaged from old house } & 1,000 \\\hline\end{array}$$
What total dollar amount should be charged to Land and what amount should be charged to the new Building?

---

Definitions:

Legal Action

A process by which a court of law is engaged to pursue a legal remedy, often involving litigation.

Differing Standards

Variations in rules, regulations, or norms across different areas, organizations, or systems.

Bailments

involve the temporary transfer of possession of personal property from one party to another, under a contract, for a specific purpose.

Rationale

The underlying reason or justification for something, such as a legal ruling, a business decision, or a philosophical stance.