Werner's Fish House purchases a tract of land and an existing building for $840,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, Werner pays closing costs, including title insurance of $1,400. The company also pays $10,800 in property taxes, which includes $7,400 of back taxes (unpaid taxes from previous years) paid by Werner on behalf of the seller and $3,400 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $42,000 to tear down the old building and remove it from the site. Werner is able to sell salvaged materials from the old building for $6,000 and pays an additional $11,500 to level the land. Required: Determine the amount Werner's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a minus sign.) Total cost of the land
Werner's Fish House purchases a tract of land and an existing building for $840,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, Werner pays closing costs, including title insurance of $1,400. The company also pays $10,800 in property taxes, which includes $7,400 of back taxes (unpaid taxes from previous years) paid by Werner on behalf of the seller and $3,400 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $42,000 to tear down the old building and remove it from the site. Werner is able to sell salvaged materials from the old building for $6,000 and pays an additional $11,500 to level the land. Required: Determine the amount Werner's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a minus sign.) Total cost of the land
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 42P
Related questions
Question
Please read and answer the question carefully.
![Werner's Fish House purchases a tract of land and an existing building for $840,000. The company plans to remove the old building
and construct a new restaurant on the site. In addition to the purchase price, Werner pays closing costs, including title insurance of
$1,400. The company also pays $10,800 in property taxes, which includes $7,400 of back taxes (unpaid taxes from previous years) paid
by Werner on behalf of the seller and $3,400 due for the current fiscal year after the purchase date. Shortly after closing, the company
pays a contractor $42,000 to tear down the old building and remove it from the site. Werner is able to sell salvaged materials from the
old building for $6,000 and pays an additional $11,500 to level the land.
Required:
Determine the amount Werner's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a
minus sign.)
Total cost of the land
2$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0dca0735-100d-4c55-bf07-5c5fbc1c89d2%2Fb91f82ff-7fb9-4436-84a0-3a6a038e388c%2F6ue9lcq_processed.png&w=3840&q=75)
Transcribed Image Text:Werner's Fish House purchases a tract of land and an existing building for $840,000. The company plans to remove the old building
and construct a new restaurant on the site. In addition to the purchase price, Werner pays closing costs, including title insurance of
$1,400. The company also pays $10,800 in property taxes, which includes $7,400 of back taxes (unpaid taxes from previous years) paid
by Werner on behalf of the seller and $3,400 due for the current fiscal year after the purchase date. Shortly after closing, the company
pays a contractor $42,000 to tear down the old building and remove it from the site. Werner is able to sell salvaged materials from the
old building for $6,000 and pays an additional $11,500 to level the land.
Required:
Determine the amount Werner's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a
minus sign.)
Total cost of the land
2$
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
![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