Question

Olly & Sons is a construction company. The company started the year with $90,000 in the land account. During Year 2, Olly & Sons purchased multiple lots of land. The first lot cost $25,000, the second lot cost $28,000 and the third lot cost $31,000. The company sold one lot that had a cost of $50,000 for $50,000. What is the ending balance in the land account?

Answer 1

Answer:

$124,000

Explanation:

The computation of ending balance in the land account is shown below:-

ending balance in the land account = Beginning balance of Land account + Total balance of land - Cost of land sold

= $90,000 + ($25,000 + $28,000 + $31,000) - $50,000

= $90,000 + $174,000 - $50,000

= $124,000

Therefore for computing the ending balance in the land account we simply applied the above formula.