Question 12: A company purchases land for $150,000 and incurs $10,000 in closing costs. Provide a comprehensive explanation of the journal entries and subsequent adjustments to record the land acquisition and related expenses.

Requirements:

1. Record the journal entry to recognize the purchase of land and closing costs.
2. Post the journal entry to the Land account in the ledger.
3. Analyze the impact of the land acquisition on the company's balance sheet.
4. Discuss the factors influencing the valuation of land on a company's financial statements.
5. Evaluate the treatment of land improvements and depreciation.
6. Record the journal entry to capitalize land improvements costing $20,000.
7. Post the journal entry to the Land Improvements account in the ledger.
8. Discuss the implications of capitalizing land improvements on a company's financial position.
9. Analyze the effect of land appreciation or depreciation on a company's financial statements.
10. Illustrate how land-related transactions are disclosed in financial statements.