Falcon Company Acquired an Adjacent Lot to Construct a New

question 65

Multiple Choice

Falcon Company acquired an adjacent lot to construct a new warehouse, paying $40,000 and giving a short-term note for $410,000. Legal fees paid were $13,275, delinquent taxes assessed were $14,500, and fees paid to remove an old building from the land were $15,800. Materials salvaged from the demolition of the building were sold for $6,800. A contractor was paid $890,000 to construct the new warehouse. What is the cost of the land to be reported on the balance sheet?

• A) $486,775
• B) $493,575
• C) $450,000
• D) $443,200

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