Question

7. EX.09-03.ALGO (Algorithmic) Determining Cost of Land Fastball Delivery Company acquired an adjacent lot to construct a new warehouse, paying $36,000 and giving a short-term note for $336,000. Legal fees paid were $1,675, delinquent taxes assumed were $14,100, and fees paid to remove an old building from the land were $16,600. Materials salvaged from the demolition of the building were sold for $5,600. A contractor was paid $1,130,900 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

Answer 1

Answer:

Computaion of cost of the land to be reported on the balance sheet
		Amount($)
	Initial Amount Paid	36,000
Addition	Short-term note	3,36,000
Addition	Legal fees paid	1,675
Addition	Delinquent taxes	14,100
Addition	Fees paid to remove an old building from the land	16,600
Less:	Materials salvaged from the demolition of the building.	-5,600
	Cost of the land	3,98,775