Polly Corporation purchases land for $200,000. Polly incurs the following costs associated with the land acquisition: Property taxes for current year $4,000 Delinquent property taxes 8,000 Commission to broker 14,000 Cost of grading 2,000 Cost of land improvements 12,000 What is the amount that Polly should capitalize in the land account

$224,000

Explanation:

The solution of the amount that Polly should capitalize in the land account is given below:-

Amount capitalize in the land account = Purchase of land + Delinquent property taxes + Commission to broker + Cost of grading

= $200,000 + $8,000 + $14,000 + $2,000

= $224,000

Hence, for determining the amount capitalize in the land account we simply used the above formula.

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