If a Parcel of Land Is Offered for Sale at $45,000

question 59

Multiple Choice

If a parcel of land is offered for sale at $45,000, is assessed for tax purposes at $20,000, is considered by its purchasers to be worth $36,000, and is purchased for $34,000, theland should be recorded in the purchaser's books at:

• A)$54,000.
• B)$20,000.
• C)$45,000.
• D)$34,000.
• E)$36,000.

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Definitions:

Compounded

The process where the value of an investment increases due to the interest earned on both the principal and the accumulated interest.

Semi-annually

refers to occurrences that happen twice a year.

RRSP

Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, with tax advantages.

Compounded

The process of accumulating interest on an investment or loan where the earned interest is added to the principal, leading to interest being earned on interest.