Question

Wildhorse Co, purchases land for $155000 cash, Wildhorse assumes $4900 in property taxes due on the land. The ttle and attorney fees totaled $1600. Wildhorse has the land graded for $4200. They paid $1 Bo00 for paving of a parking lot. What amount does Wildhorse record as the cost for the land? A. $160800. B. $155000, C. $184700. D. $165700

Answer 1

Answer:

The correct answer is D. $165700.

Explanation:

This question requires us to tell the cost of land that will be reported by Wildhorse Co. As per accounting standards all directly attributable expenses are include in the cost of an asset. So the following amounts will be included in the cost of the asset

Cost of the land = Purchase price + Property tax + Attorney fees +land Grad

                           = 155,000 + 4,900 + 1,600 + 4,200

                           = $ 165,700