Gagner Clinic purchases land for $130,000 cash. The clinic assumes $1,500 in pro

Question

Gagner Clinic purchases land for $130,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land?

$134,700

$132,500

$132,200

$130,000

$134,700

Gagner Clinic purchases land for $130,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land? $134,700 $132,500 $132,200 $130,000

Explanation / Answer

134,700. All costs in purchasing and preparing the land should be capitalized. The property tax payments should be considered part of the purchase price of the land.

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