Determining cost of land On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $45,000 in cash and giving a short-term note for $309,000. Legal fees paid were $2,495, delinquent taxes assumed were $11,800, and fees paid to remove an old building from the land were $20,500. Materials salvaged from the demolition of the building were sold for $5,300. A contractor was paid $1,076,200 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

Determining cost of land On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $45,000 in cash and giving a short-term note for $309,000. Legal fees paid were $2,495, delinquent taxes assumed were $11,800, and fees paid to remove an old building from the land were $20,500. Materials salvaged from the demolition of the building were sold for $5,300. A contractor was paid $1,076,200 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5Q: For each of the following transactions, state whether the cost would be capitalized (C) or recorded...

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