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Question(s) / Instruction(s):

 A company purchased land for $80,000 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.  Under the cost principle, the cost of land would be recorded at

a)            $87,000.

b)            $80,000.

c)            $85,000.

d)            $92,000.

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