AB Recently Purchased an Old Building and the Land on Which

question 155

Multiple Choice

AB recently purchased an old building and the land on which it is located. The old building will be demolished at a net cost of $10,000. A new building will be built on the site. The demolition cost should be:

• A) capitalized as part of the cost of the land.
• B) capitalized as part of the cost of the new building.
• C) depreciated over the remaining life of the old building.
• D) written off as an extraordinary loss in the year of demolition.

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Definitions:

Unfreezing Stage

The initial phase in the change process where individuals or organizations become aware of the need for change, preparing them to move from their current way of doing things.

Organizational Change

Refers to the processes in which an organization undergoes a transformation, modifying significant aspects of its operations, structure, or culture.

Initial Stage

The beginning phase of a process, project, or development, often characterized by planning, research, and setting objectives.

Organizational Change Efforts

Initiatives undertaken by an organization to improve its performance, adapt to market dynamics, or implement new strategies.