UPS purchased a six-acre tract of land in Columbia, SC and an existing building for $500,000. The company plans to remove the old building and construct a distribution hub and a small office building on the site. In addition to the purchase price, the company made the following expenditures at closing of the purchase: Title insurance $3,000 Commissions 16,000 Property taxes *6,000 * The $6,000 in property taxes included $2,000 of delinquent taxes paid by UPS on behalf of the seller and $4,000 attributable to the portion of the current fiscal year after the purchase date. Shortly after closing, the company paid a contractor $25,000 to tear down the old building and remove it from the site. An additional $5,000 was paid to regrade the land. What amount should be capitalized?

UPS purchased a six-acre tract of land in Columbia, SC and an existing building for $500,000. The company plans to remove the old building and construct a distribution hub and a small office building on the site. In addition to the purchase price, the company made the following expenditures at closing of the purchase: Title insurance $3,000 Commissions 16,000 Property taxes 6,000 The $6,000 in property taxes included $2,000 of delinquent taxes paid by UPS on behalf of the seller and $4,000 attributable to the portion of the current fiscal year after the purchase date. Shortly after closing, the company paid a contractor $25,000 to tear down the old building and remove it from the site. An additional $5,000 was paid to regrade the land. What amount should be capitalized?

Name: • UPS purchased a six-acre tract of land in Columbia, SC and an exist
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Description: • UPS purchased a six-acre tract of land in Columbia, SC and an existing building for$500,000. The company plans to remove the old building and construct a distribution huband a small office building on the site. In addition to the purchase price, t

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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