Whyte Clinic purchases land for $280,000 cash. The clinic assumes $3,000 in property taxes due on the land. The title and attorney fees totaled $2,000. The clinic had the land graded for $4,400. What amount does Whyte 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 ($280,000), property taxes assumed ($3,000), title and attorney fees ($2,000), and grading costs ($4,400). Total cost = $280,000 + $3,000 + $2,000 + $4,400 = $289,400.

Whyte Clinic Purchases Land for $280,000 Cash