Wilson Co. purchased land as a factory site for $900,000. Wilson paid $80,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title investigation and making the purchase. Architect's fees were $31,200. Title insurance cost $2,400, and liability insurance during construction cost $2,600. Excavation cost $10,440. The contractor was paid $2,800,000. An assessment made by the city for pavement was $6,400. Interest costs during construction were $170,000.

The cost of the land that should be recorded by Wilson Co. is: __________

a. $980,480
b. $986,880
c. $989,880
d. $996,280

Including costs in the cost of land means capitalizing the expenses associated with land purchase. Every reasonable expense that is related to the land purchase is included. This includes the specific cost of the land purchase, cost of demolishing old buildings, legal fees, and title insurance for the land. The salvage value realized from the sale of the old buildings' scraps is deducted.

Data and Calculations:

Cost of land purchase = $900,000

Cost of demolishing old buildings = $80,000

Salvage value realized = $5,400

Legal fees = $3,480

Architect's fees = $31,200

Title Insurance = $2,400

Liability insurance during construction = $2,600

Excavation = $10,440

Payment to contractor = $2,800,000

Pavement assessment cost = $6,400

Construction interest expense = $170,000

Cost of the land:

Cost of land purchase = $900,000

Cost of demolishing old buildings = $80,000

Salvage value realized = ($5,400)

Legal fees = $3,480

Title Insurance = $2,400

Total cost of land = $980,400

Thus, the cost of the land that should be recorded by Wilson Co. is a. $980,480.

Learn more about capitalizing cost of land at https://brainly.com/question/14282490