If a Corporation Purchases Land and Building and Subsequently Tears

question 169

Multiple Choice

If a corporation purchases land 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 land 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.