Acme Purchased a Property That Included Both Land and a Building

question 33

Multiple Choice

Acme purchased a property that included both land and a building for $200,000.Acme hired an appraiser who determined that the market value of the land was $140,000 and the market value of the building was $50,000.
-At what amount should Acme record the land cost?

• A) $147,368
• B) $52,632
• C) $200,000
• D) $140,000

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Definitions:

Foreclose

The legal process by which a lender takes control of a property from a borrower due to failure to meet the repayment terms of a loan.

Defaulted

Defaulted refers to the failure to fulfill an obligation, especially the failure to repay a loan on time or to meet a contractual condition, leading to possible legal penalties or loss of rights.

Equity of Redemption

The right of a mortgagor to reclaim property on which a mortgage exists by repaying the debt before a foreclosure sale.

Legal Title

The legal entitlement to possess property, safeguarded and upheld by the legal system.