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On March 1, 2010, Geoff Company acquired real estate, on which it planned to construct a small office building, by paying $100,000 in cash. An old warehouse on the property was demolished at a cost of $8,000; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,500 attorney's fee for work concerning the land purchase, $5,000 real estate broker's fee, $9,100 architect's fee, and $14,000 to put in driveways and a parking lot.
Question a. Determine the amount to be reported as the cost of the land.
Question b. For each cost not used in part (a), indicate the account to be debited.
Financial Statement Analysis and Preparation
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Computation of Free Cash Flow
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