Question

Determining Cost of Land Fastball Delivery Company acquired an adjacent lot to construct a new warehouse, paying $27,000 and giving a short-term note for $268,000. Legal fees paid were $1,910, delinquent taxes assumed were $11,100, and fees paid to remove an old building from the land were $22,600. Materials salvaged from the demolition of the building were sold for $4,400. A contractor was paid $896,800 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet. $

Answer 1

DETERMINATION OF THE COST OF LAND TO BE REPORTED IN THE BALANCE SHEET :-

Amount paid for acquire an adjacent lot = $ 27,000

Add:- Short term note = $ 268,000

Add:- Legal fee paid = $ 1,910

Add:- Delinquent tax = $ 11,100

Add:- Fees paid to remove an old building. = $ 22,600

Less:- Salvage material sold = ($ 4,400)

COST OF LAND = ​​ $3,26,210

SO THE COST OF LAND TO BE REPORTED IN THE BALANCE SHEET IS $3,26,210.