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

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 67IIP

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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 $11,500 to level the land.
Required:
Determine the amount Werner's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a
minus sign.)
Total cost of the land
2$

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