A Company Purchased Property for $100,000

question 1

Multiple Choice

A company purchased property for $100,000. The property included a building, equipment and land. The building was appraised at $62,000, the land at $45,000, and the equipment at $18,000. What is the amount of cost to be allocated to the building in the accounting records?

• A) $0
• B) $49,600
• C) C)$62,000
• D) $100,000

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Definitions:

Contingent Immunization

A mixed passive-active strategy that immunizes a portfolio if necessary to guarantee a minimum acceptable return but otherwise allows active management.

Risk Tolerance

An investor's ability or willingness to endure market volatility and potential loss in the value of investments.

Life Cycle

The series of stages through which a product or project passes, from initial concept through growth, maturity, and eventual decline.

Tax-Deferral Option

The feature of the U.S. Internal Revenue Code that capital gains tax is assessed only when the asset is sold.