Final answer:
Attorney's fees and recording fees related to purchasing land are capitalized and included in the cost of land as a long-term asset on the balance sheet under the section 'Property, Plant, and Equipment.'
Step-by-step explanation:
Attorney's fees and recording fees related to purchasing land are costs that are necessary to prepare the asset for its intended use. These costs should be capitalized and included in the cost of the land on the balance sheet. The value of land is listed as a long-term asset on the balance sheet under 'Property, Plant, and Equipment (PP&E).' Since these fees are part of the acquisition cost, they are not expensed but rather added to the basis of the land, which will be depreciated over its useful life if applicable. However, land is not depreciated, so these costs will remain as part of the land's value on the balance sheet until it's sold or otherwise disposed of. According to a bank's balance sheet, assets include cash, loans made by the bank, and securities like U.S. Treasury bonds. Liabilities represent what the bank owes to others, including deposits made by the bank's customers. The net worth or bank capital is calculated by subtracting the total liabilities from total assets and reflects the owner's equity in the bank. The relation between assets and liabilities plus the bank's net worth will always balance to zero in a T-account format used on the balance sheet.