A company purchased land for $72,000 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. Proceeds from salvage of the demolished building was $1,200. Under the cost principle, the cost of land would be recorded at
a. $82,800.
b. $72,000.
c. $77,800.
d. $84,000.
Ans: a. $82,800.
Business
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