Question

Land is purchased for $60,000. Back taxes paid by the purchaser were $2,400, clearing and grading costs were $3,000, fencing costs were $2,500, and lighting costs were $500. What is the cost of the land?

a) $65,400
b) $60,000
c) $68,400
d) $66,400

Answer 1

The total cost of the land, including the purchase price and additional expenses, is $68,400.

Step-by-step explanation:

The cost of the land includes the purchase price as well as additional expenses necessary to prepare the land for use. In this case, the total cost would be calculated by adding the purchase price ($60,000) to the back taxes ($2,400), clearing and grading costs ($3,000), fencing costs ($2,500), and lighting costs ($500). Therefore, the total cost of the land would be $60,000 + $2,400 + $3,000 + $2,500 + $500 = $68,400.