Whyte Clinic purchases land for $420,000 cash.The clinic assumes $4,500 in property taxes due on the land.The title and attorney fees totaled $3,000.The clinic had the land graded for $6,600.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 ($420,000), property taxes assumed ($4,500), title and attorney fees ($3,000), and grading costs ($6,600). Total cost = $420,000 + $4,500 + $3,000 + $6,600 = $434,100.

Whyte Clinic Purchases Land for $420,000 Cash