Gagner Clinic purchases land for $115,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land?

Question

Quizplus · Accepted Answer

The cost of land includes all expenditures necessary to acquire the land and prepare it for its intended use. This includes the purchase price ($115,000), property taxes assumed ($1,500), title and attorney fees ($1,000), and grading costs ($2,200). Therefore, the total cost recorded is $115,000 + $1,500 + $1,000 + $2,200 = $119,700.

Gagner Clinic Purchases Land for $115,000 Cash