McCoy's Fish House purchases a tract of land and an existing building for $910,000. The company plans to remove the old building
and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of $2,100. The company also pays $12,200 in property taxes, which includes $8,100 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $4,100 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $45,500 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $3,200 and pays an additional $10,100 to level the land.
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