Gagner Clinic purchases land for $175,000 cash. The clinic assumes $1,500 in property taxes due on the land. The title and attorney fees totaled $1,000. The clinic has the land graded for $2,200. What amount does Gagner Clinic record as the cost for the land?Group of answer choices$175,000$157,500$157,200$179,700
Question
Gagner Clinic purchases land for 1,500 in property taxes due on the land. The title and attorney fees totaled 2,200. What amount does Gagner Clinic record as the cost for the land?Group of answer choices157,500179,700
Solution
To determine the cost of the land for Gagner Clinic, we need to consider the various expenses associated with the purchase.
First, the clinic purchased the land for $175,000 in cash. This amount is part of the cost of the land.
Next, the clinic assumed $1,500 in property taxes due on the land. This amount is also considered part of the cost of the land.
Additionally, the clinic incurred $1,000 in title and attorney fees. These fees are also included in the cost of the land.
Lastly, the clinic had the land graded for $2,200. This expense is also considered part of the cost of the land.
To calculate the total cost of the land, we add up all these expenses:
1,500 (property taxes) + 2,200 (grading expense) = $179,700
Therefore, Gagner Clinic should record the cost of the land as $179,700.
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