Question

Cullumber clinic purchases land for 550000 cash. The clinic assumes 4200 in property taxes due on the land. The title and attorney fees totaled 3100. The clinic had the land graded for 8100. What amount does Cullumber clinic record as the cost for the land?

1) 550000
2) 557300
3) 558100
4) 565400

Answer 1

The Cullumber clinic would record the cost of the land as the sum of the purchase price, property taxes, title and attorney fees, and grading costs, which totals to $565,400.

Step-by-step explanation:

The Cullumber clinic should record the cost of the land by adding the original purchase price and all additional expenses that are directly attributable to acquiring the land and preparing it for use. To find the total cost that should be recorded, you can use the following steps:

1. Add the purchase price of the land, which is $550,000.
2. Add the property taxes assumed, which amount to $4,200.
3. Add the title and attorney fees, which are $3,100.
4. Add the cost for grading the land, which is $8,100.
5. Combine all these costs to determine the total cost recorded for the land.

Therefore, the total cost recorded for the land is $550,000 (purchase price) + $4,200 (property taxes) + $3,100 (title and attorney fees) + $8,100 (land grading) = $565,400.

The correct answer to the student's question is option 4) $565,400.