In 2023, Falcon Manufacturing Co. purchased land to construct a new warehouse. The company incurred the following costs related to the land acquisition: • Cost of land: $620,000 • • Legal fees to purchase land: $18,000 Cost of demolishing an old structure on the land: $42,000 • Proceeds from the sale of scrap materials from the • demolition: $7,000 Construction cost of new warehouse (so far): $300,000 At what amount should Falcon capitalize the land on its balance sheet?

In 2023, Falcon Manufacturing Co. purchased land to construct a new warehouse. The company incurred the following costs related to the land acquisition: • Cost of land: $620,000 • • Legal fees to purchase land: $18,000 Cost of demolishing an old structure on the land: $42,000 • Proceeds from the sale of scrap materials from the • demolition: $7,000 Construction cost of new warehouse (so far): $300,000 At what amount should Falcon capitalize the land on its balance sheet?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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Land should be capitalized at what amount
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