Dionne Developments

question 93

Multiple Choice

Dionne Developments. owns a piece of land it had purchased in 20X4 for $600,000. When they started to develop the land in 20X5, they discovered that there were environmental problems with the land. It is now estimated to be worth only $250,000. Which of the following is the correct way to account for this?

• A) The land should be amortized at a new rate to reflect the decline in its value
• B) No accounting is necessary because the land is recorded at its historical cost, not its market value.
• C) The land should be written off completely because now the company cannot use it for the purpose they intended to.
• D) The land account should be written down to $150,000 and a loss recognized.

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Definitions:

Opportunities

Circumstances or situations that present favorable conditions for achieving certain goals or advancing one's interests.

Entrepreneurs

Individuals who organize, manage, and assume the risks of a business or enterprise, often innovating and driving economic growth.

Problems

Issues or obstacles that need to be solved or overcome.

Scientific Charity

An approach to philanthropy that emphasizes the use of research, evidence, and data to inform charitable activities and maximize impact.