Falcon Company Acquired an Adjacent Lot to Construct a New

question 33

Essay

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 a new warehouse. Determine the cost of the land to be reported on the balance sheet and show your work.

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Definitions:

Stable Isotope

Non-radioactive forms of atoms that have the same number of protons but a different number of neutrons, used in various scientific applications to study and trace processes.

Radiometric Dating

A method for determining the age of an object containing organic material by measuring the levels of various isotopes within it.

Earth's Crust

The outermost layer of the Earth, composed of a variety of rocks and minerals; it forms the continents and ocean basins.

Fault

A fracture or zone of fractures between two blocks of rock, which can cause large scale earth movements.