Merchant Company purchased property for a building site. The costs associated with the property were: Purchase...

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Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price Real est

Multiple Choice O $192,000 to Land: $1,100 to Building. O $194,100 to Land; $0 to Building. $176,900 to Land: $19,200 to Buil

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Answer 1

Answer #1

Answer is Option 5

$195,200 to Land and $0 to building

Total expenses:

Purchase Price : $ 176,000

Real Estate Commission: $ 15,100

Legal Fees : $ 900

Expenses to Clearing the Land: $ 2,100

Expenses to remove the old building $ 1,100

Total Cost of the land $ 195,200

No Building is Constructed. Hence Nothing is allocated to Building

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Answer 2

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