On October 10 Givens Retail purchased a parking lot for cash of $360000.The cost of the land was $175000.The paving cost $125000 and the lights to illuminate the new parking area cost $60000.Use the following tabular analysis to record the transaction.

Question

Quizplus · Accepted Answer

The purchase of the parking lot includes not just the land, but also the improvements made to the land (i.e the paving and lights), therefore the transaction should increase Land for its original cost of $175,000 and Land Improvements for the additional cost of $185,000. Cash should be decreased by the total cost of the transaction, which is $360,000.

On October 10 Givens Retail Purchased a Parking Lot for Cash