I. Ramirez Company made the following payments related to a land Purchase price
ID: 2587558 • Letter: I
Question
I. Ramirez Company made the following payments related to a land Purchase price due tases Pate searchl buildingctive operations Cost of razing old building Interest (incurred after productive operations had begun) Proceeds from salvage of old building 57,500 650 275 +300 160 What is the capitalizable cost of the land? a. $9,725 b. 58,010 c.$7,850 d. $7,500 The balance sheet is a snapshot of a company's financial position at a particular date. rue 2. b. False 3. Notes to financial statements provide a. discussions that further explain items shown in the financial statements. b. comparative financial information with the previous year. c. management's discussions about plans for the future. d. the report of the independent auditors. 4. What financial statement is considered the cornerstone of financial reporting? a. the income statement b. the statement of cash flows c. the statement of shareholders' equity the balance sheet 5. The Sahara Company's inventory was partially destroyed on June 4, 2016, when its warehouse caught on fire early in the morning. Inventory that had a cost of $8,000 was saved. The accounting records, which were located in a fireproof vault, contained the following information: Sales (1/1/16 through 6/3/16) Purchases (1/1/16 through 7/3/16) Inventory (1/1/16) Gross profit ratio $260,000 190,000 40,000 30% of cost Using the gross profit method, what is the estimated cost of the inventory destroyed by the fire? a. $130,000 b. $48,000 c.$39,000 d. $30,000Explanation / Answer
1. Correct option is $7,865
Explanation;
Capitalized cost of land:
=Purchase price+past due taxes +title search+cost of razing old building-proceeds from salvage of old building.
=$7500+$650+$275+$1300-$1675
=$7,850