Question

Shamrock, Inc. purchases land for $490000 cash. The clinic assumes $5300 in property taxes due on the land. The title and attorney fees totaled $2600. The clinic had the land graded for $6400. What amount does Shamrock, Inc. record as the cost for the land?a. $426,600. b. $420,000. c. $434,100. d. $427,500.

Answer 1

$504,300

Explanation:

The total cost of the land that Shamrock Inc. purchased has to include:

• the actual price paid for the land: $490,000
• legal fees and real estate commissions: $2,600
• taxes due and permits, zoning fees, etc: $5,300
• site preparation (includes land grading): $6,400

The total cost of the land is: $504,300