Pippen Clinic Ltd.purchases land for $287,500 cash.The title and legal fees totalled $1,200.The clinic has the land graded for $30,000.What amount does Pippen Clinic record as the cost for the land?

Question

Quizplus · Accepted Answer

The cost of land includes the purchase price plus any costs incurred to prepare the land for its intended use. Therefore, the cost for the land for Pippen Clinic would be:
Purchase price: $287,500
Title and legal fees: $1,200
Land grading: $30,000
Total cost: $318,700