Question

Patrick Enterprises recently installed a parking lot. The paving costs were $38,750, and the lighting costs were $20,000. In addition, the company entered into a $1,000 annual agreement with Romero Cleaning to maintain the parking lot for 3 years. What is the total cost to be included in the Land Improvements account

Answer 1

$58,750

Step-by-step explanation:

Paving Costs $38,750

Lighting Costs $20,000

Total cost to be included in land improvement account $58,750

Please note that cleaning agreement cost is revenue expenditure,therefore should be charged to profit and loss account not in land improvement account.