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