Merchant Company purchased property for a building site. The costs associated with the property were: Purchase price $ 178,000 Real
Merchant Company purchased property for a building site, incurring the following costs associated with the property:
- Purchase price: $178,000
- Real estate commissions: $15,300
- Legal fees: $1,100
- Expenses for clearing the land: $2,300
- Expenses for removing an old building: $1,300
What portion of these costs should be allocated to the cost of the land, and what portion should be allocated to the cost of the new building?
3 Answers
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