McCoy's Fish House purchases a tract of land and an existing building for $830,000. 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 $1,300. The company also pays $10,600 in property taxes, which includes $7,300 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $3,300 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $41,500 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $5,800 and pays an additional $11,400 to level the land.
Required:
Determine the amount McCoy's Fish House should record as the cost of the land.
Answers: 2
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McCoy's Fish House purchases a tract of land and an existing building for $830,000. The company plan...
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