Determining Cost of Land: Northwest Delivery Company acquired an adjacent lot to

Q: Determining Cost of Land: Northwest Delivery Company acquired an adjacent lot to

NOTE: $ 660000 paid to construct new warehouse will not be part of cost of land. COST OF LAND: PARTICULARS AMOUNT ($) Paid to acquired land 75,000 Short term note 90,000 Legal Fees 2,500 Delinquent Tax 22,400 Fees to remove old building 14,500 TOTAL 2,04,400 Less: Materials salvaged from the demolition of building sold 7,500 COST OF LAND 1,96,900

ID: 2417896 • Letter: D

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Determining Cost of Land:

Northwest Delivery Company acquired an adjacent lot to construct a new warehouse, paying $75,000 and giving a short-term note for $90,000. Legal fees paid were $2,500, delinquent taxes assumed were $22,400, and fees paid to remove an old building from the land were $14,500. Materials salvaged from the demolition of the building were sold for $7,500. A contractor was paid $660,000 to construct a new warehouse.

Determine the cost of the land to be reported on the balance sheet.

Explanation / Answer

NOTE: $ 660000 paid to construct new warehouse will not be part of cost of land.

COST OF LAND: PARTICULARS AMOUNT ($) Paid to acquired land 75,000 Short term note 90,000 Legal Fees 2,500 Delinquent Tax 22,400 Fees to remove old building 14,500 TOTAL 2,04,400 Less: Materials salvaged from the demolition of building sold 7,500 COST OF LAND 1,96,900

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Determining Cost of Land: Northwest Delivery Company acquired an adjacent lot to

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