XYZ Leased a Tract of Land for a 20-Year Term

question 177

Multiple Choice

XYZ leased a tract of land for a 20-year term.The lease agreement did not contain a bargain purchase option,and consequently,the land will revert back to the lessor at the end of the lease term.At the inception of the lease,XYZ initiated construction on a small building on the land.The building was completed at the end of the third year of the lease,at a cost of $60,000.The building was a permanent structure on the land.Its estimated life was 20 years and was expected to have no residual value.XYZ should record annual depreciation (straight-line) on the building of:

• A) $2,400
• B) $3,000
• C) $3,529
• D) $6,000

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Definitions:

Psychological Development

The changes in cognitive, emotional, and social capacities and behaviors across the lifespan, influenced by biological, environmental, and cultural factors.

Life Span

The length of time for which a person or organism lives or a thing functions.

Physical Maturation

The process of physical growth and development, from infancy through adulthood, including the development of both primary and secondary sex characteristics.

Parents

Caregivers of offspring in their own species; in humans, typically comprised of a father and mother, who provide physical, emotional, and social support for their children.