Crane Company purchases land for $175000 cash. Crane assumes $4800 in property taxes due on the land. The title and attorney fees totaled $1600. Crane has the land graded for $4200. They paid $15000 for paving of a parking lot. What amount does Crane record as the cost for the land? $175000. $200600. $180800. $185600.

$185,600

Explanation:

The cost of the land includes all the expenses that represent an essential part of either the land itself, or the transaction. In this case, this would be:

$175,000 in cash for the land itself.

$4,800 in property taxes due.

$1,600 in attorney fees (without the attorneys, the transaction could not have been completed).

and $4,200 for grading the land (the grading is a process inseparable from the land itself).

If we add these figures we obtain the correct answer of $185,600.

The parking lot, on the other hand, is an entity, or property, that is separate from the land, and its cost of $15,000 is not added to the cost of the land. The parking lot is in fact, a fixed asset that will be depreciated accross time, because the paving of a parking lot deteriorates, whereas the land cannot be depreciated because land, or terrain, are considered to be assets with unlimited useful life.

commercial banking

provide online payment services

provide online banking

asset management firms

invest in people's funds in securities

accept tax return refunds