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Illustration: Hayes Company acquires real estate at a cash cost of $100,000

Accounting

Illustration: Hayes Company acquires real estate at a cash cost of $100,000. The property contains an old warehouse that is razed at a net cost of $6,000 ($7,500 in costs less $1,500 proceeds from salvaged materials). Additional expenditures are the attorney's fee, $1,000, and the real estate broker's commission, $8,000. Required: Determine the amount to be reported as the cost of the land. 10-6 LO 1 P
Illustration: Lenard Company purchases a delivery truck at a cash price of $22,000. Related expenditures are sales taxes $1,320, painting and lettering $500, motor vehicle license $80, and a three-year accident insurance policy $1,600. Compute the cost of the delivery truck. Truck

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Ans.

1.

Particulars Amount
Cash price of property $           100,000.00
Net removal cost of warehouse $                6,000.00
Attorney's fees $                1,000.00
Real estate broker’s commission   $                8,000.00
Cost of Land $           115,000.00

2.

Particulars Amount
Cash price of Truck $              22,000.00
Sales Tax $                1,320.00
Painting & Lettering $                    500.00
Cost of Delivery Truck $              23,820.00

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