The following 4 costs were incurred for Celadon Inc. to acquire and prepare land
ID: 2510116 • Letter: T
Question
The following 4 costs were incurred for Celadon Inc. to acquire and prepare land for a new parking lot:
Purchase price of land: $950,000 Cost to clear the land: $55,000
Cost of paving the lot: $35,000 Cost of lighting the parking lot: $12,000
How much should be recorded in the Land Improvements account on Celadon Inc.’s balance sheet?
a.
$47,000
b.
$90,000
c.
$102,000
d.
$1,052,000
a.
$47,000
b.
$90,000
c.
$102,000
d.
$1,052,000
Explanation / Answer
a. $47,000
Amount to be recorded in the Land Improvements account on Celadon Inc.’s balance sheet:
= Cost of paving the lot + Cost of lighting the parking lot
= $35,000 + $12,000
= $47,000
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