Chapter 10, Problem 10.2EX

(a)

To determine

Cost of Land: The cost of land includes the following costs:

• Purchase price of land
• Attorney fees
• Real estate agent commission
• Title
• Recording fees
• Additional expenses :
  • Clearing
  • Filling and leveling of land
  • Removing of old buildings

To explain: whether the tree cutting, land clearing, and grading costs of constructing the ski slopes should be debited to the land account.

(b)

To determine

To explain: whether such costs debited to land account should be depreciated.