Business High School

McCoy's Fish House purchases a tract of land and an existing building for $940,000. 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 $2,400. The company also pays $12,800 in property taxes, which includes $8,400 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $4,400 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $47,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $3,800 and pays an additional $10,400 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.)

Answers

Answer 1

Answer:

$1,004,400

Explanation:

The computation of the cost of land is shown below:-

The Total cost of land = Purchase price of the land + Title Insurance + Property Taxes + Cost of removing the building + Level the land - Salvaged materials

= $940,000 + $2,400 + $8,400 + $47,000 + $10,400 - $3,800

= $1,004,400

Therefore for computing the total cost of land we simply applied the above formula.

Related Questions

Lawrence recently bought a brand new Bentley Mulsanne, a very expensive car, but he is suffering from buyer's remorse. He wishes he would have bought something that made a bigger impression on the ladies at the Taco Bell drive­through. Howard, however, recently purchased a pre­owned '86 Camaro with a flame job on the hood from a car dealer, and when he rolls through Taco Bell with the T-tops off, the drive-through ladies are always staring at his car and his mullet hairdo. Howard is far more satisfied with his car than Lawrence. From a marketing point of view, which of the following concepts has contributed to Howard feeling satisfied with this purchase?
a. CRM implementation
b. Howard's full partnership with his '86 Camaro
c. Perceived value of the car
d. Customer loyalty

Answers

Answer:

The marketing concept that contributed to Howard feeling satisfied with his purchase of "a preowned '86 Camaro with a flame job on the hood" is

c. Perceived value of the car

Explanation:

Howard evaluates the merits of this preowned '86 Camaro as it has the ability to satisfy his needs for winning the attention of the drive-through ladies at Taco Bell.  When he "rolls through the Taco Bell with the T-tops off the ladies keep staring at his car."  It is this attention that he needs.  And the car investment ensures that he achieves this attention from the ladies.  Howard's feeling of satisfaction is accentuated the more when compared with the less-than-impressive attention that Lawrence pools with the girls, while driving his expensive Bentley Mulsanne through the same Taco Bell.

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