Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land? a. Purchase price of the land b. Cost of demolishing an old garage located on the land c. Cost of a new parking lot constructed on the lane d. Brokerage commission paid to the real estate agent who handled the land transaction

Question

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Answer 1

Textbook Question

Chapter 7, Problem 1QC

Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land?

a. Purchase price of the land

b. Cost of demolishing an old garage located on the land

c. Cost of a new parking lot constructed on the lane

d. Brokerage commission paid to the real estate agent who handled the land transaction

Expert Solution & Answer

To determine

The costs which would not be included in the cost of the land.

Answer to Problem 1QC

The costs which would not be included in the cost of the land is option c. Cost of a new parking lot constructed on the land.

Explanation of Solution

Plant assets:

Plant assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Justification for incorrect answers:

Cost of land:

The amounts that should be recorded as a cost of a land are the total amount of expenditure that are incurred to acquire the land and to make it ready for use. The cost of land and building includes the following costs:

Purchase price of land
Demolishment cost of the old building on the land
Attorney fees
Real estate agent commission
Title
Recording fees
Legal fees
Additional expenses :
- Clearing
- Filling and leveling of land

Option a, b, and d:

The purchase price of the land, cost of demolishing an old garage located on the land, and brokerage commission paid to the real estate agent who handled the land transaction are the costs that would be included in the cost of the land. Hence, the options a, b and d are the incorrect answers.

Justification for the correct answer:

As the cost of a new parking lot constructed on the land is not the expenditure which is incurred to acquire the land and to make it ready for use, it would not be included in the cost of the land.

Therefore, option c. is the correct answer.

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01:46

Students have asked these similar questions

Northern Company has a process costing system using the weighted average cost flow method. All materials are introduced at the beginning of the process in Department 1. The following information is available for the month of January: Units Work in process, January 1 (60% done as to conversion 4,000 Started in January 12,000 Transferred to Department 2 during January 10,000 Work in Process, January (20% done as to conversion cost) 6,000 The number of equivalent units of production for conversion costs for the month of January is: A. 12,000 B. 11,600 C. 11,200

Provide correct answer general Accounting

Can you provide solutions??

Answer 2

Textbook Question

Chapter 7, Problem 1QC

Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land?

a. Purchase price of the land

b. Cost of demolishing an old garage located on the land

c. Cost of a new parking lot constructed on the lane

d. Brokerage commission paid to the real estate agent who handled the land transaction

Expert Solution & Answer

To determine

The costs which would not be included in the cost of the land.

Answer to Problem 1QC

The costs which would not be included in the cost of the land is option c. Cost of a new parking lot constructed on the land.

Explanation of Solution

Plant assets:

Plant assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Justification for incorrect answers:

Cost of land:

The amounts that should be recorded as a cost of a land are the total amount of expenditure that are incurred to acquire the land and to make it ready for use. The cost of land and building includes the following costs:

Purchase price of land
Demolishment cost of the old building on the land
Attorney fees
Real estate agent commission
Title
Recording fees
Legal fees
Additional expenses :
- Clearing
- Filling and leveling of land

Option a, b, and d:

The purchase price of the land, cost of demolishing an old garage located on the land, and brokerage commission paid to the real estate agent who handled the land transaction are the costs that would be included in the cost of the land. Hence, the options a, b and d are the incorrect answers.

Justification for the correct answer:

As the cost of a new parking lot constructed on the land is not the expenditure which is incurred to acquire the land and to make it ready for use, it would not be included in the cost of the land.

Therefore, option c. is the correct answer.

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Answer 3

Textbook Question

Chapter 7, Problem 1QC

Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land?

a. Purchase price of the land

b. Cost of demolishing an old garage located on the land

c. Cost of a new parking lot constructed on the lane

d. Brokerage commission paid to the real estate agent who handled the land transaction

Expert Solution & Answer

To determine

The costs which would not be included in the cost of the land.

Answer to Problem 1QC

The costs which would not be included in the cost of the land is option c. Cost of a new parking lot constructed on the land.

Explanation of Solution

Plant assets:

Plant assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Justification for incorrect answers:

Cost of land:

The amounts that should be recorded as a cost of a land are the total amount of expenditure that are incurred to acquire the land and to make it ready for use. The cost of land and building includes the following costs:

Purchase price of land
Demolishment cost of the old building on the land
Attorney fees
Real estate agent commission
Title
Recording fees
Legal fees
Additional expenses :
- Clearing
- Filling and leveling of land

Option a, b, and d:

The purchase price of the land, cost of demolishing an old garage located on the land, and brokerage commission paid to the real estate agent who handled the land transaction are the costs that would be included in the cost of the land. Hence, the options a, b and d are the incorrect answers.

Justification for the correct answer:

As the cost of a new parking lot constructed on the land is not the expenditure which is incurred to acquire the land and to make it ready for use, it would not be included in the cost of the land.

Therefore, option c. is the correct answer.

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Answer 4

Textbook Question

Chapter 7, Problem 1QC

Smatter Corporation purchased land for a new building. Which of the following costs would not be included in the cost of the land?

a. Purchase price of the land

b. Cost of demolishing an old garage located on the land

c. Cost of a new parking lot constructed on the lane

d. Brokerage commission paid to the real estate agent who handled the land transaction

Expert Solution & Answer

To determine

The costs which would not be included in the cost of the land.

Answer to Problem 1QC

The costs which would not be included in the cost of the land is option c. Cost of a new parking lot constructed on the land.

Explanation of Solution

Plant assets:

Plant assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Justification for incorrect answers:

Cost of land:

The amounts that should be recorded as a cost of a land are the total amount of expenditure that are incurred to acquire the land and to make it ready for use. The cost of land and building includes the following costs:

Purchase price of land
Demolishment cost of the old building on the land
Attorney fees
Real estate agent commission
Title
Recording fees
Legal fees
Additional expenses :
- Clearing
- Filling and leveling of land

Option a, b, and d:

The purchase price of the land, cost of demolishing an old garage located on the land, and brokerage commission paid to the real estate agent who handled the land transaction are the costs that would be included in the cost of the land. Hence, the options a, b and d are the incorrect answers.

Justification for the correct answer:

As the cost of a new parking lot constructed on the land is not the expenditure which is incurred to acquire the land and to make it ready for use, it would not be included in the cost of the land.

Therefore, option c. is the correct answer.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

The costs which would not be included in the cost of the land.

Answer to Problem 1QC

The costs which would not be included in the cost of the land is option c. Cost of a new parking lot constructed on the land.

Explanation of Solution

Plant assets:

Plant assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Justification for incorrect answers:

Cost of land:

The amounts that should be recorded as a cost of a land are the total amount of expenditure that are incurred to acquire the land and to make it ready for use. The cost of land and building includes the following costs:

Purchase price of land
Demolishment cost of the old building on the land
Attorney fees
Real estate agent commission
Title
Recording fees
Legal fees
Additional expenses :
- Clearing
- Filling and leveling of land

Option a, b, and d:

The purchase price of the land, cost of demolishing an old garage located on the land, and brokerage commission paid to the real estate agent who handled the land transaction are the costs that would be included in the cost of the land. Hence, the options a, b and d are the incorrect answers.

Justification for the correct answer:

As the cost of a new parking lot constructed on the land is not the expenditure which is incurred to acquire the land and to make it ready for use, it would not be included in the cost of the land.

Therefore, option c. is the correct answer.

Answer 8

Expert Solution & Answer

To determine

The costs which would not be included in the cost of the land.

Answer to Problem 1QC

The costs which would not be included in the cost of the land is option c. Cost of a new parking lot constructed on the land.

Explanation of Solution

Plant assets:

Plant assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Justification for incorrect answers:

Cost of land:

The amounts that should be recorded as a cost of a land are the total amount of expenditure that are incurred to acquire the land and to make it ready for use. The cost of land and building includes the following costs:

Purchase price of land
Demolishment cost of the old building on the land
Attorney fees
Real estate agent commission
Title
Recording fees
Legal fees
Additional expenses :
- Clearing
- Filling and leveling of land

Option a, b, and d:

The purchase price of the land, cost of demolishing an old garage located on the land, and brokerage commission paid to the real estate agent who handled the land transaction are the costs that would be included in the cost of the land. Hence, the options a, b and d are the incorrect answers.

Justification for the correct answer:

As the cost of a new parking lot constructed on the land is not the expenditure which is incurred to acquire the land and to make it ready for use, it would not be included in the cost of the land.

Therefore, option c. is the correct answer.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

The costs which would not be included in the cost of the land.

Answer 12

Answer to Problem 1QC

The costs which would not be included in the cost of the land is option c. Cost of a new parking lot constructed on the land.

Answer 13

Explanation of Solution

Plant assets:

Plant assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Justification for incorrect answers:

Cost of land:

The amounts that should be recorded as a cost of a land are the total amount of expenditure that are incurred to acquire the land and to make it ready for use. The cost of land and building includes the following costs:

Purchase price of land
Demolishment cost of the old building on the land
Attorney fees
Real estate agent commission
Title
Recording fees
Legal fees
Additional expenses :
- Clearing
- Filling and leveling of land

Option a, b, and d:

The purchase price of the land, cost of demolishing an old garage located on the land, and brokerage commission paid to the real estate agent who handled the land transaction are the costs that would be included in the cost of the land. Hence, the options a, b and d are the incorrect answers.

Justification for the correct answer:

As the cost of a new parking lot constructed on the land is not the expenditure which is incurred to acquire the land and to make it ready for use, it would not be included in the cost of the land.

Therefore, option c. is the correct answer.

Answer 14

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Answer to Problem 1QC

Explanation of Solution

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