If a Corporation Purchases a Lot and Building and Subsequently

question 67

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) management's plans for the property when the building was acquired.
• D) the planned future use of the parking lot.