Bachman Company plans to develop a shopping center.In the first quarter,the following amounts were spent:
$$\begin{array} { | l | r | }
\hline \text { Acquisition of land } & \$ 24,000 \
\hline \text { Surveys and legal fees } & 1500 \
\hline \text { Land clearing } & 1100 \
\hline \text { Fencing } & 6000 \
\hline \text { Install lighting and signage } & 1860 \
\hline
\end{array}$$ What amount should be recorded as the cost of the land in the company's books?

Question

Bachman Company plans to develop a shopping center.In the first quarter,the following amounts were spent:
$$\begin{array} { | l | r | } 
\hline \text { Acquisition of land } & \$ 24,000 \
\hline \text { Surveys and legal fees } & 1500 \
\hline \text { Land clearing } & 1100 \
\hline \text { Fencing } & 6000 \
\hline \text { Install lighting and signage } & 1860 \
\hline
\end{array}$$ What amount should be recorded as the cost of the land in the company's books?

Quizplus · Accepted Answer

The cost of the land includes the purchase price and any costs associated with preparing the land for its intended use. In this case, the purchase price was $25,000 and the grading and clearing costs were $1,600, making a total cost of $26,600. Therefore, the amount recorded as the cost of the land should be $26,600.

Bachman Company Plans to Develop a Shopping Center What Amount Should Be Recorded as the Cost of the Quarter,the