Werner's Fish House purchases a tract of land and an existing building for $870,000. The company plans to remove the oid bulding and construct a new restaurant on the site. In addition to the purchase price, Werner pays closing costs, including title insurance of $1700. The company also pays $11,400 in property taxes, which includes $7700 of back taxes (unpaid taxes from previous years) paid by Werner on behalf of the seller and $3700 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $43,500 to tear down the old building and remove it from the site. Werner is able to sell salvaged materials from the old bullding for $6,600 and pays an additional $11,800 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 $870,000. The company plans to remove the oid bulding and construct a new restaurant on the site. In addition to the purchase price, Werner pays closing costs, including title insurance of $1700. The company also pays $11,400 in property taxes, which includes $7700 of back taxes (unpaid taxes from previous years) paid by Werner on behalf of the seller and $3700 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $43,500 to tear down the old building and remove it from the site. Werner is able to sell salvaged materials from the old bullding for $6,600 and pays an additional $11,800 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

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 42P

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