Problem:
Fastball Delivery Company acquired an adjacent lot to construct a new warehouse, paying $41,000 and giving a short-term note for $319,000. Legal fees paid were $2,070, delinquent taxes assumed were $10,200, and fees paid to remove an old building from the land were $16,500. Materials salvaged from the demolition of the building were sold for $5,400. A contractor was paid $1,094,400 to construct a new warehouse.
Required:
Question 1: Determine the cost of the land to be reported on the balance sheet.
Note: Provide support for your rationale.