A is corrent. Any cost involved in preparing land for its ultimate use (such as a factory site) is considered part of the cost of the land. Before the land can be used as a building site, it must be purchased (involving costs such as purchase price, legal fees, and title insurance) and the old building must be razed (cost of demolition less proceeds from sale of scrap). The total balance in the land account should be $469,000.
B is incorrect. Any cost involved in preparing land for its ultimate use (such as a factory site) is considered part of the cost of the land. Before the land can be used as a building site, it must be purchased (involving costs such as purchase price, legal fees, and title insurance) and the old building must be razed (cost of demolition less proceeds from sale of scrap). The total balance in the land account should be $469,000.
C is incorrect. Any cost involved in preparing land for its ultimate use (such as a factory site) is considered part of the cost of the land. Before the land can be used as a building site, it must be purchased (involving costs such as purchase price, legal fees, and title insurance) and the old building must be razed (cost of demolition less proceeds from sale of scrap). The total balance in the land account should be $469,000.
C is incorrect. Any cost involved in preparing land for its ultimate use (such as a factory site) is considered part of the cost of the land. Before the land can be used as a building site, it must be purchased (involving costs such as purchase price, legal fees, and title insurance) and the old building must be razed (cost of demolition less proceeds from sale of scrap). The total balance in the land account should be $469,000.
