Question

Whyte Clinic purchases land for $280,000 cash. The clinic assumes $3,000 in property taxes due on the land. The title and attorney fees totaled $2,000. The clinic had the land graded for $4,400. What amount does Whyte Clinic record as the cost for the land?a. $284,400.b. $280,000.c. $289,400.d. $285,000.

Answer 1

c. $289,400

Step-by-step explanation:

The computation of the cost of the land is shown below:

= Purchase cost of land + property taxes + attorney fees + land graded cost

= $280,000 + $3,000 + $2,000 + $4,400

= $289,400

We added the property taxes, attorney fees, and the land graded cost to the purchase cost of the land. Thus, all the expenses and charges should be considered for computing the cost of land