On March 1, 2017, Geoffrey Company acquired real estate, on which it planned to construct a small office building, by paying $85,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were so for $2,200. Additional expenditures before construction began included $1,500 attorney's fee for work concerning the land purchase, $5,500 real estate broker's fee, $9,100 architect's fee, and $16,000 to put in driveways and a parking lot. Instructions (a) Determine the amount to be reported as the cost of the land. (b) For each cost not used in part (a), indicate the account to be increased

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On March 1, 2017, Geoffrey Company acquired real estate, on
which it planned to construct a small office building, by paying
$85,000 in cash. An old warehouse on the property was
demolished at a cost of $8,200; the salvaged materials were so
for $2,200. Additional expenditures before construction began
included $1,500 attorney's fee for work concerning the land
purchase, $5,500 real estate broker's fee, $9,100 architect's fee,
and $16,000 to put in driveways and a parking lot.
Instructions
(a) Determine the amount to be reported as the cost of the
land.
(b)
For each cost not used in part (a), indicate the account to
be increased
Transcribed Image Text:On March 1, 2017, Geoffrey Company acquired real estate, on which it planned to construct a small office building, by paying $85,000 in cash. An old warehouse on the property was demolished at a cost of $8,200; the salvaged materials were so for $2,200. Additional expenditures before construction began included $1,500 attorney's fee for work concerning the land purchase, $5,500 real estate broker's fee, $9,100 architect's fee, and $16,000 to put in driveways and a parking lot. Instructions (a) Determine the amount to be reported as the cost of the land. (b) For each cost not used in part (a), indicate the account to be increased
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