Final answer:
The total cost of land for Bachman, Inc. to be recorded on the company's books is $24,200, which includes acquisition costs, surveys, legal fees, land clearing, and fencing. Costs such as installing lighting and signage are not included as they are not necessary for land preparation.
Step-by-step explanation:
The question pertains to determining the cost of land on a corporation’s books, specifically for Bachman, Inc. which plans to develop a shopping center. To record the cost of the land, we need to include all expenses directly related to the acquisition and preparation of the land for its intended use.
Acquisition of land: $15,000
Surveys and legal fees: $1,300
Land clearing: $900
Fencing: $7,000
Install lighting and signage: $1,360
Costs that are directly associated with getting the land ready for its intended purpose, such as surveys, legal fees, land clearing, and fencing, should be included in the land cost. However, costs for items like installing lighting and signage, which are not necessary for preparing the land itself, are usually capitalized as a separate asset.
Calculation of Land Cost:
Adding Acquisition cost: $15,000
Adding Surveys and legal fees: $1,300
Adding Land clearing cost: $900
Adding Fencing cost: $7,000
The total cost of the land should be recorded as $24,200 on the company’s books. ($15,000 + $1,300 + $900 + $7,000)