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Question
randall company bought real estate, on which there was an old office building, for $400,000. it paid $30,000 in cash as a down payment and signed an 8% mortgage for the remainder. it immediately had the old building razed at a net cost of $25,000. attorneys were paid $8,000 in connection with the land purchase and an additional $4,000 in connection with permits and zoning variances necessary for randalls new office building. $25,000 was paid for excavation for the basement of the new building, $1,600,000 was paid for construction of the new building, and $55,000 was paid for a parking lot and necessary walkways and driveways. for how much should the land be recorded?
a.$433,000
b.$400,000
c.$425,000
d.$403,000
Answer
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