Oakland Corp

question 152

Multiple Choice

Oakland Corp.purchased land and a building for a combined cost of $500,000.Oakland must

• A) record the $500,000 acquisition cost in an account called Land and Buildings.
• B) depreciate the $500,000 acquisition cost, less any residual value, over the expected useful life of the building.
• C) because part of the purchase involved land, record all of the cost in the Land account.
• D) allocate the $500,000 acquisition cost to separate Land and Buildings accounts based on their respective fair market values.

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Definitions:

Manufacturer List Prices

The recommended retail price set by manufacturers for their products, often used as a starting point for negotiations between retailers and wholesalers.

FOB Origin Pricing

A pricing term indicating that the buyer is responsible for freight costs and assumes risk for the goods once they leave the seller's premises.

Uniform Delivered Pricing

The price the seller quotes that includes all transportation costs.

Transportation Costs

Expenses associated with the process of moving goods or materials from one location to another.