A land site for a new office building is purchased for $360,000 by Texas Coast Company. A barn on the site will be razed at a net cost of $34,000.
The $34,000 razing expenditure is properly debited to:
A) Office Building
B) Land
C) Razing Expense
D) Land Improvements

Question

Quizplus · Accepted Answer

A payment to remove a barn increases the land's acquisition cost, because removing the barn prepares the land for its intended use. The cost should be capitalized or added to the cost of the land.

A Land Site for a New Office Building Is Purchased