Fresh Veggies, Inc. (FVI) Land Acquisition Analysis

What is the amount FVI should record as the cost of the land?

Cost of land:________________?

The amount FVI should record as the cost of the land is $538,900.

In order to determine the cost of the land for Fresh Veggies, Inc. (FVI), we need to consider the various expenditures related to the acquisition. These include the purchase price of the land and warehouse, as well as additional costs such as the broker's commission, title insurance, and miscellaneous closing costs.

The purchase price of the land and warehouse is $530,000. To this amount, we add the broker's commission of $33,000, the title insurance of $2,300, and the miscellaneous closing costs of $6,600. This gives us a total of $571,900 in expenditures related to the acquisition.

However, we also need to consider the cost of demolishing the warehouse. The demolition cost of $33,000 is not directly related to the land itself but rather to the removal of an existing structure. Therefore, this cost should be excluded from the calculation of the cost of the land.

To determine the cost of the land, we subtract the demolition cost from the total expenditures related to the acquisition. Thus, the cost of the land for FVI would be $571,900 - $33,000 = $538,900.

Therefore, the amount FVI should record as the cost of the land is $538,900.