Cordelia Corp.acquires land for $120,000 cash.Additional costs are as follows: Cordelia will record the cost of the land as
A)$120,000.
B)$124,120.
C)$124,880.
D)$140,880.

Question

Cordelia Corp.acquires land for $120,000 cash.Additional costs are as follows:  Cordelia will record the cost of the land as
A)$120,000. 
B)$124,120. 
C)$124,880. 
D)$140,880.

Quizplus · Accepted Answer

The cost of the land is $120,000 and the additional costs are $4,880 ($1,000 commission + $3,880 in closing costs). Therefore, the total cost of the land is $124,880. Cordelia will record this as the cost of the land.