Hull Company acquires land for $86,000 cash. Additional costs are as follows: Hull will record the acquisition cost of the land as

Question

Hull Company acquires land for $86,000 cash. Additional costs are as follows:  Hull will record the acquisition cost of the land as

Quizplus · Accepted Answer

The acquisition cost of the land includes the purchase price plus any additional costs that are directly attributable to the acquisition. Here, the additional costs are:
Survey and clearing fees: $2,370
Delinquent property taxes: $1,000
The total additional costs are $3,370.
Therefore, the acquisition cost of the land is $86,000 + $3,370 = $89,370. The correct answer is D.

Hull Company Acquires Land for $86,000 Cash