Acme Investments plans to develop a shopping center.In the first quarter,they spent the following amounts: $$\begin{array} { l r }
\text { Purchase land } & \$ 100,000 \
\text { Surveys and legal fees } & 1,200 \
\text { Land clearing } & 5,000 \
\text { Install fences around the property } & 4,600 \
\text { Install lighting and signage } & 2,600
\end{array}$$
-0 What amount should be recorded as the land improvements cost?

Question

Acme Investments plans to develop a shopping center.In the first quarter,they spent the following amounts: $$\begin{array} { l r } 
\text { Purchase land } & \$ 100,000 \
\text { Surveys and legal fees } & 1,200 \
\text { Land clearing } & 5,000 \
\text { Install fences around the property } & 4,600 \
\text { Install lighting and signage } & 2,600
\end{array}$$ 
-0 What amount should be recorded as the land improvements cost?

Quizplus · Accepted Answer

Land improvements cost includes expenditures that are made to make the land ready for its intended use, excluding the cost of the land itself. In this case, land improvements include land clearing ($5,000), installing fences ($4,600), and installing lighting and signage ($2,600), totaling $7,200.

Acme Investments Plans to Develop a Shopping Center -0 What Amount Should Be Recorded as the Land Improvements