The cost of land to be used in the operations of a business should include all of the following except
A) commissions related to the acquisition of the land.
B) excavation in preparation for the construction of a new building on the land.
C) property taxes to the date of acquisition assumed by the purchaser.
D) the cost of surveys of the land.

Question

Quizplus · Accepted Answer

Excavation costs in preparation for the construction of a new building on the land are considered part of the construction cost of the building, not the cost of the land. Costs directly associated with making land ready for its intended use, like commissions, property taxes assumed by the purchaser, and survey costs, are capitalized as part of the land cost. However, excavation for a new building is specific to the building's construction rather than the land acquisition itself.

The Cost of Land to Be Used in the Operations