Wesley Hospital installs a new parking lot.The paving cost $60000 and the lights to illuminate the new parking area cost $24000.Which of the following statements is true with respect to these additions?
A)$60000 should be added to the Land account.
B)$24000 should be added to Land Improvements.
C)$84000 should be added to the Land account.
D)$84000 should be added to Land Improvements.

Question

Quizplus · Accepted Answer

The cost of the paving ($60000) should be added to Land Improvements account because it is a permanent improvement to the land. The cost of the lights ($24000) should also be added to Land Improvements account as it is a permanent improvement to the land. Therefore, the total cost of additions to Land Improvements account is $84000.

Wesley Hospital Installs a New Parking Lot