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Title fees300000 brokerage fees750000 brokerage

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Title Fees……………………………………………………………………..3,000.00Brokerage Fees………………………………………………………………...7,500.00Brokerage Fees………………………………………………………………...7,500.00Cost of Grading……………………………………………………………..…1,500.00Cost of Grading……………………………………………………………..…1,500.00Cost of removing (demolition) unwanted buildingBr. 5000Cost of removing (demolition) unwanted buildingBr. 5000Less: Salvage received……………………………….(2000)…………………3,000.00Less: Salvage received……………………………….(2000)…………………3,000.00Total cost of land…………………………………………………… .….Total cost of land…………………………………………………… .….Br. 225,000.00Br. 225,000.00Generally, land is part of property, plant and equipment. If the major purpose of acquiring andGenerally, land is part of property, plant and equipment. If the major purpose of acquiring andholding land is speculative, it is more appropriately classified as an investment. If the land isholding land is speculative, it is more appropriately classified as an investment. If the land isheld on a real estate concern for resale, it should be classified as inventory. When the land hasheld on a real estate concern for resale, it should be classified as inventory. When the land hasbeen purchased for the purpose of constructing a building, all costs incurred up to thebeen purchased for the purpose of constructing a building, all costs incurred up to theexcavation for the new building are considered land costs. Removal of old buildings clearing,excavation for the new building are considered land costs. Removal of old buildings clearing,grading and filling are considered land costs because these costs are necessary to get the landgrading and filling are considered land costs because these costs are necessary to get the landin condition for its intended purpose. Any proceeds obtained in the process of getting the landin condition for its intended purpose. Any proceeds obtained in the process of getting the land23
ready for its intended use, such as salvage receipts on the demolition of an old building areready for its intended use, such as salvage receipts on the demolition of an old building aretreated as reductions in the price of the land.treated as reductions in the price of the land.Cost of buildingsCost of buildingsWhen an existing building is purchased its cost includes, the purchase price plus all repairsWhen an existing building is purchased its cost includes, the purchase price plus all repairsand other expenses required to put it in a usable conditions. On the other hand, when aand other expenses required to put it in a usable conditions. On the other hand, when abusiness constructs a new building, the cost includes all reasonable and necessarybusiness constructs a new building, the cost includes all reasonable and necessaryexpenditures, such as those for materials, labor, part of the overhead and other indirect costs,expenditures, such as those for materials, labor, part of the overhead and other indirect costs,engineers and architects’ fees, insurance during construction, interest incurred on constructionengineers and architects’ fees, insurance during construction, interest incurred on constructionloans during the period of construction, lawyers' fees, and building permits. If outsideloans during the period of construction, lawyers' fees, and building permits. If outsidecontractors are used in the construction, the net contract price plus other expenditurescontractors are used in the construction, the net contract price plus other expenditures

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Term
Fall
Professor
cherinet
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