A Company Acquired Some Land for $75,000 to Construct a New

question 29

Multiple Choice

A company acquired some land for $75,000 to construct a new office complex.Legal fees paid were $2,750, delinquent taxes assumed were $3,250, and $6,350 was paid to remove an old building.Materials salvaged from the demolition of the building were sold for $2,300.Determine the cost of the land to be reported on the balance sheet.

• A) $85,050
• B) $89,650
• C) $84,100
• D) $87,350

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Definitions:

Efficient Market Hypothesis

The assertion that information travels around the U.S. financial system so fast that stock prices virtually always reflect all available information. The concept implies that technical analysis is useless.

Stock Prices

The cost of purchasing a share of a company at any given time, reflecting the market's valuation of the company.

Publicly Available Information

Information that is not restricted and can be accessed by the general public, often used in the context of financial markets.

Cumulative Feature

A characteristic of preferred stock that allows for the accumulation of unpaid dividends which must be paid out before any dividends are given to common stockholders.