Question

​McArthur, Inc. plans to develop a shopping center. In the first​ quarter, the following amounts were​ spent: Acquisition of land ​$19,000 Surveys and legal fees 900 Land clearing ​1,100 Fencing ​2,000 Install lighting and signage ​14,060 What amount should be recorded as the land improvements​ cost?

Answer 1

Answer:

The $16,060 should be recorded as the land improvements​ cost

Explanation:

For computing the land improvements cost, we considered the following cost which is shown below:

1. Fencing cost

2. Install lighting and signage cost

So, the land improvement cost would be equal to

= Fencing cost + Install lighting and signage cost

= 2,000 + $14,060

= $16,060

The acquisition of land, survey legal fees, land clearing is not part of land improvements. So, it is not considered.

Hence, the $16,060 should be recorded as the land improvements​ cost