Merry Clinic purchases land for $80,000 cash. The clinic assumes $2,000 in property taxes due on the land. The legal fees totalled $1,000. The clinic has the land graded for $2,200. What amount does Merry Clinic record as the cost for the land?

Question

Quizplus · Accepted Answer

The cost of the land includes the purchase price, plus any additional costs necessary to get it ready for use. This includes the $80,000 purchase price, $2,000 in property taxes, $1,000 in legal fees, and $2,200 for grading, totaling $85,200.

Merry Clinic Purchases Land for $80,000 Cash