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? v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker-assignments& 013 Ocis146 Blackboard Learn MEC0231 ?yBUS241 eBook S Show Me How Calculator Print Itenm Determining Cost of Land Fastball Delivery Company acquired an adjacent lot to construct a new warehouse, paying $42,000 a assumed were $12.700, and fees paid to remove an old building from the land were $20,800. Mater paid $1,106,600 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

Explanation / Answer

Calculation of cost of Land For the purpose of reporting cost of land, all the expenses spent directly for purchasing the land and its incidental expenses are required to be included in the cost of land/ hence following are considered as direct cost to buy land: Particulars Ampount Purchase cost 42000 Short term note payable 322000 legal fees 1330 delinquit taxes 12700 fees paid to remove old building 20800 Less: Material Salvage 5500 Net Income 398830

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