A plot of land was purchased for $120,000 and 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 is the total cost incurred to acquire it. This includes the purchase price, past due property taxes, non-refundable taxes on the purchase, and title search cost. 
Capitalized cost = $120,000 (purchase price) + $10,000 (past due property taxes) + $1,400 (non-refundable taxes) + $500 (title search cost) 
= $131,900. 
Therefore, the best choice is D.

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