Question

16. For each of the following amounts paid by a purchaser, determine whether the amount is debited to Land, Land Improvements, or Building. Transaction Account Debited Building permits Cost of clearing land and removing unwanted buildings Parking lot lighting Delinquent property taxes Cost to renovate a building to make it ready for use Taxes assessed to transfer ownership (title) of land

Answer 1

Transaction	Account debited
Buidings permits	Building
Cost of clearing land and Removing unwanted buildings	Land
Parking lot lighting	Land improvements
Delinquent property taxes	Building
Cost to renovate a building to make it ready for use	Building

Note:

1.If you are preparing land for its intended purpose, then include these costs in the cost of the land asset.

2. Land improvements are enhancements to a plot of land to make the land more usable.