Answer:
D. $156,200
Explanation:
Given
Cost of Land = $145000 cash.
Property Tax = $5500
Title and attorney fees = $1800.
Land grading = $3900.
Paving of a parking lot = $16000
The amount does Ivanhoe record as the cost for the land is calculated as follows;
First, we need to understand that only amount paid by Ivanhoe directly for the land will be considered.
In this case, amount paid for parking lot will not be included..
This is calculated by adding the following;
Cost of Land , Property Tax, Title and attorney fees and Land grading.
Hence, total amount = $145000 + $5500 + $1800 + $3900.
Total = $156,200
Ivanhoe holds a record of $156,200 as the cost for the land
Answer:
$156200.
Explanation:
When you are recording the purchase cost of land, you must include all the ordinary and necessary costs = land, title fees, legal fees, survey costs, zoning fees, grading, draining, and the cost to raze an old structure.
This costs will be included in the value of the land and will not depreciate.
Other costs, which are considered land improvements include parking lots, sidewalks, landscaping, irrigation systems, and others must be recorded separately because they can either be depreciated or expensed as deductible repairs.
The cost of the land will include:
land $145,000
property taxes $5,500
title and legal fees $1,800
land grading $3,900
total $156,200
The parking lot ($16,000) can be recorded as land improvements and be expensed immediately or depreciated.
