Chiquita Corp. purchased a large area of land with the intention to transform it into a banana plantation. Before the new seedlings can be planted, the site, which is prone to flooding, must be drained. The cost of the draining should be

Question

Quizplus · Accepted Answer

The cost of draining the land should be capitalized as part of the cost of the land because it is a necessary expense to prepare the land for its intended use, which in this case is to transform it into a banana plantation.