A plot of land was purchased for $120,000 which had $10,000 of past due property taxes on it. Non-refundable taxes on the purchase were $1,400 and the title search cost $500. The capitalized cost of the land was
A) $120,000.
B) $121,900.
C) $130,000.
D) $131,900.

Question

Quizplus · Accepted Answer

The capitalized cost of the land includes the purchase price ($120,000), the past due property taxes ($10,000), the non-refundable taxes ($1,400), and the title search cost ($500).

Capitalized cost of the land = $120,000 + $10,000 + $1,400 + $500
= $131,900

A Plot of Land Was Purchased for $120,000 Which Had