A company purchased land for $90,000 cash. real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. under the historical cost principle, the cost of land would be recorded at

Respuesta :

Based in the historical cost principle, the total cost of the land would be the summation of all cost, either direct or indirect.

Therefore it would be:

Cost of Land = $90,000 cash + $5,000 commission + $7,000 demolishing

Cost of Land = $102,000

 

 

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