If a Corporation Purchases a Lot and Building and Subsequently

question 61

Multiple Choice

If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on

• A)the significance of the cost allocated to the building in relation to the combined cost of the lot and building.
• B)the length of time for which the building was held prior to its demolition.
• C)the contemplated future use of the parking lot.
• D)the intention of management for the property when the building was acquired.

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