I need need a step by step solution to this accounting question? -

Next Day Delivery Company acquired an adjacent lot to construct a new warehouse, paying $25,000 and giving a short-term note for $175,000. Legal fees paid were $1,200, delinquent taxes assumed were $10,850, and fees paid to remove an old building from the land were $15,000. Materials salvaged from the demolition of the building were sold for $2,400. A contractor was paid $760,000 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.

If I remember correctly, everything is considered to be a cost of the land except the construction of the building...25,000 + 175,000 +1,200 + 10,850 + 15,000 + (2,400) = 224,650

The cost of the land is the purchase price of the land, the legal fees and the delinquent taxes.The cost of removing the existing building less the value of the salvaged materials is part of the cost of the new warehouse.This is because demolishing the existing building is not required unless and until the warehouse is built. Hope this helpsJerry-the-bookkeeper