Marcus Company paid $780,000 cash for a tract of land on which it plans to erect a new distribution center, and paid $11,150 in legal fees related to the purchase. Marcus also agreed to assume responsibility for $17,080 of unpaid taxes on the property. The company incurred a cost of $21,955 to remove an old abandoned farmhouse from the land. Prepare a schedule showing the cost of the land acquired. Solution Cost land acquired land cost $ 7,80,000 legal fees $ 11,150 property tax $ 17,080 removal cost of old abandoned farmhouse from land $ 21,955 Total $ 8,30,185.

1. Marcus Company paid $780,000 cash for a tract of land on which it plans
to erect a new distribution center, and paid $11,150 in legal fees related to
the purchase. Marcus also agreed to assume responsibility for $17,080 of
unpaid taxes on the property. The company incurred a cost of $21,955 to
remove an old abandoned farmhouse from the land. Prepare a schedule
showing the cost of the land acquired.
Solution
Cost land acquired land cost $ 7,80,000 legal fees $ 11,150 property tax $ 17,080
removal cost of old abandoned farmhouse from land $ 21,955 Total $ 8,30,185