McCoy's Fish House purchases a tract of land and an existing building for $880,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of $1,800. The company also pays $11,600 in property taxes, which includes $7,800 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $3,800 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $44,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $6,800 and pays an additional $11,900 to level the land. Required: Determine the amount McCoy'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
McCoy's Fish House purchases a tract of land and an existing building for $880,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of $1,800. The company also pays $11,600 in property taxes, which includes $7,800 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $3,800 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $44,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $6,800 and pays an additional $11,900 to level the land. Required: Determine the amount McCoy'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
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Transcribed Image Text:McCoy's Fish House purchases a tract of land and an existing building for $880,000. The company plans to remove the old building
and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of
$1,800. The company also pays $11,600 in property taxes, which includes $7,800 of back taxes (unpaid taxes from previous years) paid
by McCoy on behalf of the seller and $3,800 due for the current fiscal year after the purchase date. Shortly after closing, the company
pays a contractor $44,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the
old building for $6,800 and pays an additional $11,900 to level the land.
Required:
Determine the amount McCoy'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
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