In 2020 as part of a property purchase,Melrose Ltd.incurred and paid 2019 property taxes.These costs should be
A)recognized as an impairment loss.
B)recognized on the Statement of Income as an expense.
C)recognized as a capital cost.
D)not be taken into consideration,these costs are irrelevant.

Question

Quizplus · Accepted Answer

Property taxes paid at the time of purchase are typically capitalized and added to the cost basis of the property. This is because they are considered part of the acquisition cost, rather than an operational expense.

In 2020 as Part of a Property Purchase,Melrose Ltd