Acer Investments plans to develop a shopping centre.In the first quarter,it spent the following amounts:
$$\begin{array} { | l | l | }
\hline \text { Purchase price of land } & \$ 17,000 \
\hline \text { Surveys and legal fees } &600 \
\hline \text { Land clearing } & 1100 \
\hline \text { Fencing } &8000 \
\hline \text { Install lighting and signage } & 1060 \
\hline
\end{array}$$
What amount should be recorded as the cost of land in the books of the company?

Question

Acer Investments plans to develop a shopping centre.In the first quarter,it spent the following amounts:
$$\begin{array} { | l | l | } 
\hline \text { Purchase price of land } & \$ 17,000 \
\hline \text { Surveys and legal fees } &600 \
\hline \text { Land clearing } & 1100 \
\hline \text { Fencing } &8000 \
\hline \text { Install lighting and signage } & 1060 \
\hline
\end{array}$$
What amount should be recorded as the cost of land in the books of the company?

Quizplus · Accepted Answer

The cost of land includes the purchase price and any costs incurred in preparing the land for its intended use. 
In this case, the purchase price of the land is given as $18,700. The other amounts given, such as legal fees, survey fees, and demolition costs, are not related to the land itself and should be recorded as separate expenses. Therefore, the correct amount to be recorded as the cost of land is $18,700.

Acer Investments Plans to Develop a Shopping Centre What Amount Should Be Recorded as the Cost of Land