Answer:
The answer is
$197,400.
Step-by-step explanation:
The cost of acquisition of an asset (land) is the non-depreciable costs associated with the acquisition of the land, because land is considered as an asset that does not depreciate. The costs that make up the cost of acquiring a land includes the normal, reasonable and necessary expenditures associated with the land to obtain it and get it ready for use. These include the agreed upon cash price, repair and reconditioning costs, title fees, legal fees, zoning fees and survey fees. On the there are costs of improvements made on the land and this is not part of acquisition costs because these improvements depreciate with time, and they are recorded in the cost of improvement account which takes depreciation into consideration. Example of these costs include parking lots, irrigation systems etc.
Hence in this case, all the expenditures except the cost of paving a parking lot are recorded as cost of acquisition of the land, and these include:
cost of purchase = $185,000
property taxes = $ 5,200
title and attorney fees = $ 3,100
cost of grading = $ 4,100
Total = $197,400