Question

Whyte Clinic purchases land for $420,000 cash. The clinic assumes $4,500 in property taxes due on...

Whyte Clinic purchases land for $420,000 cash. The clinic assumes $4,500 in property taxes due on the land. The title and attorney fees totaled $3,000. The clinic had the land graded for $6,600. What amount does Whyte Clinic record as the cost for the land?

A.

$427,500.
B.

$426,600.
C.

$420,000.
D.

$434,100.
Business   Accounting   
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Homework Answers

Answer #1

The financial accounting term cost of land refers to the asset valuation method that applies to land appearing on a company's balance sheet. The cost of land would include all expenses associated with the acquisition of the property, as well as those needed to ready it for use by the company.

Particulars Amount
land $420,000
Property taxes $4,500
Title and attorney fee $3,000
Land graded $6,600
Total $434,100

Therefore answer D is correct

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