Question

borden company incurred the following costs to acquire and prepare land for a new parking lot purchase price for land cost to clear the land cost of paving lighting for the parking lot and landscaping for the parking lot how should the company determine which cost to be recorded as land improvement in which should be recorded as land

Borden Company incurred the following costs to acquire and prepare land for a new parking lot purchase price for land, cost to clear the land, cost of paving the company determine which costs should be recorded as Land Improvements and which coat should be recorded as land? O A. The costs with an unlimited life will increase Land, and the costs with a limited useful life will increase Land Improvements. O B. The costs with a limited life will increase Land, and the costs with an unlimited useful life will increase and improvements O c. The costs to be depreciated will increase Land, and the costs that will not be depreciated will increase and improvements. O D. Costs that are depreciable will increase Land Improvements, while other costs are expensed immediately because of a lack of definite de

Answer 1

Option 'A' is correct

The costs with an unlimited useful life will increase Land and the costs with a Limited useful life increase Land Improvements.

Land will not depreciate, so costs that will have limited life and depreciates should be added to the land improvements.