Question

Morgan Farms purchases land for $250,000 cash. The company assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The company has the land graded for $2,200. What amount does Morgan Farms record as the cost for the land

Answer 1

Morgan Farms should record $254,700 as the cost of the land, which includes the purchase price, property taxes, title and attorney fees, and the cost of grading.

Step-by-step explanation:

The cost of the land for Morgan Farms should be recorded by adding together the purchase price of the land, the property taxes assumed, title and attorney fees, and the cost of grading the land. To calculate the total cost:

Purchase price of the land: $250,000

Property taxes assumed: $1,500

Title and attorney fees: $1,000

Cost for grading the land: $2,200

Adding these costs together gives us:

$250,000 (purchase price) + $1,500 (property taxes) + $1,000 (title and attorney fees) + $2,200 (grading) = $254,700. Therefore, Morgan Farms would record $254,700 as the cost of the land.

Answer 2

$254,700

Step-by-step explanation:

Data provided in the question

Land Purchased = $250,000

Property taxes = $1,500

Attorney fees = $1,000

Land graded = $2,200

The calculation of the cost for the land is shown below:-

Cost for the land = Land Purchased + Property taxes + Attorney fees + Land graded

= $250,000 + $1,500 + $1,000 + $2,200

= $254,700