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18 April, 22:06

Fastball Delivery Company acquired an adjacent lot to construct a new warehouse, paying $44,000 and giving a short-term note for $271,000. Legal fees paid were $1,570, delinquent taxes assumed were $9,300, and fees paid to remove an old building from the land were $19,100. Materials salvaged from the demolition of the building were sold for $4,700. A contractor was paid $957,600 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

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  1. 18 April, 22:35
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    Total cost of the land = $340,270

    Explanation:

    According to the scenario, computation of the given data are as follows:

    Particulars Amount

    Amount paid to acquire lot to construct a new warehouse = ($44,000 + $271,000) = $315,000

    Legal fees paid = $1,570

    Taxes assumed = $9,300

    Fees paid to remove an on building = $19,100

    Material salvage sold = $4700

    we can calculate the total cost by using following formula:

    Total cost of the land = $315,000 + $1,570 + $9,300 + $19,100 - $4700

    = $340,270

    Hence, Total cost of the land is $340,270.
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