Jones Corporation purchases a piece of land for $300,000. Jones Corp. paid $3,000 in brokerage commissions, $10,000 to clear and remove an unwanted building, $5,000 for building permits to construct a new building, S500,000 to construct a new building and $5,000 in delinquent property taxes. $515,000 $505,000 What is the amount to be capitalized (debited) to the Building account?

$505000

Explanation:

The costs incurred while acquiring an asset as in the case a landed property includes all the costs incurred from the purchase of the land to the demolishing and building of a new structure on the acquired land. in this question there are two types of costs : costs inquired while buying the land and cost incurred while building the building.

building account cost: building permits + cost of constructing a new building

                                   = $5000 + $500000

                                   = $505000

the delinquent property tax is a property tax left over form the previous property tax payment hence it can't be debited to the building account but as part of the land account.