At the Beginning of the Year, the Balance in the Buildings

question 67

Multiple Choice

At the beginning of the year, the balance in the Buildings account was $1,200,000. At the end of the year, the balance in the Buildings account was $2,100,000. During the year, a building was purchased for $1,400,000. This was the only purchase of buildings during the year. What was the cost of the building or buildings sold during the year?

• A)$0
• B)$500,000
• C)$1,200,000
• D)$1,400,000

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Definitions:

Agent

An individual or entity authorized to act on behalf of another (the principal) in dealings with third parties.

Working Capital Management

The process of managing short-term assets and liabilities to ensure a company has sufficient liquidity to run its operations smoothly.

Capital Budgeting

The process of planning and managing a company's long-term investments in projects and assets to maximize value and ensure financial sustainability.

Capital Structure

The combination of long-term liabilities, targeted short-term borrowings, ordinary shares, and preferred shares that finance a corporation's daily functions and expansion.