1. At the midpoint of the current year, a $16,000 check is given for land, and...

1. At the midpoint of the current year, a $16,000 check is given for land, and the buyer assumes the liability for unpaid taxes in arrears of $400 at the end of last year and those assessed for the current year of $360.

a. Determine the cost used for recording the land acquired.

Cost of land

Answer

b. Record the journal entry on the date of the land's acquisition.
Note: Record your credit accounts in alphabetical order using the first letter of the account name.

Expert Solution

Solution: A
	Calculation of Cost of Land
	Check is given for Land	$ 16,000
	Add: Property Taxes in Arrears
	Property Taxes for last year	$ 400
	Property Taxes for Current year ($ 360 X 1/2)	$ 180
	Total Cost of Land	$ 16,580

	Answer = Cost of Land = $ 16,580

Solution: B

	Journal entry for Acquisition of Land

	Account Title and explanation	Debit	Credit

	Land	$16,580
	Cash		$16,000
	Property Tax Payable		$580
	(To record the purchase of Land)

ekkarill92 answered 1 year ago

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