Chapter 11, Problem 11.2BE

Determining Acquisition Cost. Tarpley, Inc. acquired land for $400,000. The closing costs amounted to $11,000, and the firm paid $7,250 for the current period’s property taxes at the end of the year. Tarpley plans to build a new storage facility on the land costing $2,350,000. To prepare for construction on the new facility, Tarpley removed an old storage building at a cost of $23,000 and acquired building permits for $2,500. What is the acquisition cost of the land?