Determining Cost of Land On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in cash and giving a short-term note for $324,000. Legal fees paid were $1,310, delinquent taxes assumed were $10,100, and fees paid to remove an old building from the land were $22,800. Materials salvaged from the demolition of the building were sold for $5,500. A contractor was paid $1,109,600 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 $41,000 in cash and giving a short-term note for $324,000. Legal fees paid were $1,310, delinquent taxes assumed were $10,100, and fees paid to remove an old building from the land were $22,800. Materials salvaged from the demolition of the building were sold for $5,500. A contractor was paid $1,109,600 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 38P
Related questions
Question
100%
I compute the math as directed. First I take the initial cost of the land and add it to the short-term note. Then, I add the legal fees, delinquent taxes, and demolition costs of the building. I then deduct the amount received from selling the salvage materials. I don't include the cost paid to the contractor. That cost is assigned to the new warehouse. The answers I keep coming up with says incorrect.
![Determining Cost of Land
On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in cash and giving a short-term note for $324,000.
Legal fees paid were $1,310, delinquent taxes assumed were $10,100, and fees paid to remove an old building from the land were $22,800. Materials
salvaged from the demolition of the building were sold for $5,500. A contractor was paid $1,109,600 to construct a new warehouse.
Determine the cost of the land to be reported on the balance sheet.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c66bc3d-1300-4141-a83b-0a5983915c45%2F0f810f8f-f200-4d28-a324-2cc85e95c761%2Fuhodmy_processed.png&w=3840&q=75)
Transcribed Image Text:Determining Cost of Land
On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 in cash and giving a short-term note for $324,000.
Legal fees paid were $1,310, delinquent taxes assumed were $10,100, and fees paid to remove an old building from the land were $22,800. Materials
salvaged from the demolition of the building were sold for $5,500. A contractor was paid $1,109,600 to construct a new warehouse.
Determine the cost of the land to be reported on the balance sheet.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
Working:
Calculation of cost of land
Particulars | Amount |
Initial cost | $41,000 |
Short term note | $324,000 |
Legal Fees | $1,310 |
Delinquent taxes | $10,100 |
Removing cost of old building | $22,800 |
Scrap sale | ($5,500) |
Cost of Land | $393,710 |
Note - $109,600 will not be considered since it will cost of warehouse only and not of land.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning