Determining Cost of Land On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $45,000 in cash and giving a short-term note for $317,000. Legal fees paid were $1,625, delinquent taxes assumed were $10,500, and fees paid to remove an old building from the land were $21,400. Materials salvaged from the demolition of the building were sold for $5,400. A contractor was paid $1,100,500 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

See below

Explanation:

The cost of land to be reported in the balance sheet is seen below;

= [(Cash paid + short term notice) + legal fees + taxes assumed + fees paid to remove an old building from the land - materials salvaged from the demolition of the building

= [($45,000 + $317,000) + $1,625 + $10,500 + $21,400 - $5,400

= $390,125

Hence, cost of land to be reported in the balance sheet is $390,125

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