​Imperial Corp

question 16

Essay

​Imperial Corp.purchased land and a building for $425,000.The appraised values of the land and the building were $150,000 and $450,000, respectively.In addition, the attorney was paid $10,000 for handling the closing on the property. A. What amounts will be recorded as the costs of the land and building?
B. What is the accounting justification against increasing the land and building accounts for their appraised values?

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Definitions:

Upper Echelon Theory

A theory suggesting that an organization's outcomes are influenced by the personal backgrounds and characteristics of its top executives.

Organizational Characteristics

Traits or attributes that define the nature of an organization, including its size, structure, processes, culture, and goals.

Background Characteristics

Fundamental attributes or experiences of individuals, such as age, education, or cultural background, that contribute to their identity.

Social Loafing

The phenomenon where individuals in a group contribute less effort to a task than they would when working alone.