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Topic
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In Year 1, Palm City acquired, through forfeiture as a result of nonpayment of property taxes, a parcel of land that the city intends to use as parking lot for general governmental purposes. The total amount of taxes, liens, and other costs incurred by Palm incidental to acquiring ownership and perfecting title was $20,000. The land’s fair market value at the forfeiture date was $60,000. What amount should Palm City Capitalize relative to its governmental activities?
A. $80,000
B. $20,000
C. $60,000
D. 0 MHow do you know when to use the lower of cost rule for properties ? i know there is Lower of cost for inventories but what is the rule for properties? it is not always Fair value?
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