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Pear Company plans to develop a shopping center. The following amounts were spent: Acquisition of land $16,000 Surveys and legal fees 600 Land clearing 400 Fencing 4000 Install lighting and signage 1660
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11 votes
11 votes
Pear Company plans to develop a shopping center. The following amounts were spent: Acquisition of land $16,000 Surveys and legal fees 600 Land clearing 400 Fencing 4000 Install lighting and signage 1660 What amount should be recorded as the cost of the land in the company's books

User NTR
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12 votes
12 votes

Answer: $22,660

Explanation: GAAP says that all cost incurred to bring the asset ready for its intended use can be capitalized. In this case, all cost are acceptable as they are needed to bring the land ready for use.

User Guy Yafe
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