Question

10. A local citizen donated land to the county government. It estimates that it could have purchased the same or similar land for $500,000. The donor had paid $550,000 for the land five years ago. The county incurred $150,000 in development costs to convert the land into a public park. The county should capitalize the new public park in the General Capital Assets Non-Fund account in the amount of a. $500,000. b. $550,000. c. $650,000. d. $700,000.

Answer 1

Option "C" is the correct answer to the following question.

Step-by-step explanation:

Given:

Market price of land = $500,000

Amount paid for land = $550,000

Development cost on land = $150,000

Assets Non-Fund account = ?

Computation of Capital Assets Non-Fund:

Capital Assets Non-Fund account balance = Market price of land + Development cost on land

Capital Assets Non-Fund account balance = $500,000 + $150,000

Capital Assets Non-Fund account balance = $650,000