Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price $ 187,000 Real estate commissions 16,200 Legal fees 2,000 Expenses of clearing the land 3,200 Expenses to remove old building 2,200 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price $ 187,000 Real estate commissions 16,200 Legal fees 2,000 Expenses of clearing the land 3,200 Expenses to remove old building 2,200 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Merchant Company purchased property for a building site. The costs associated with the property were:
| Purchase price | $ | 187,000 |
| Real estate commissions | 16,200 | |
| Legal fees | 2,000 | |
| Expenses of clearing the land | 3,200 | |
| Expenses to remove old building | 2,200 | |
What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
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