Question

g 1. At the midpoint of the current year, a $88,000 check is given for land, and the buyer assumes the liability for unpaid taxes in arrears of $2,200 at the end of last year and those assessed for the current year of $1,980. a. Determine the cost used for recording the land acquired.

Answer 1

Answer: $91,190

Explanation:

The cost that is used for recording the land acquired will be:

Cash = $88,000

Add: Property Taxes for last year = $2,200

Add: Property Taxes for Current year ($ 1980 × 1/2) = $990

Then, the total Cost of Land $ will be:

= $88,000 + $2,200 + $990

= $91,190