Albert Purchased a Tract of Land for $140,000 in 2009

question 137

Multiple Choice

Albert purchased a tract of land for $140,000 in 2009 when he heard that a new highway was going to be constructed through the property and that the land would soon be worth $200,000.Highway engineers surveyed the property and indicated that he would probably get $180,000.The highway project was abandoned in 2012 and the value of the land fell to $100,000.What is the amount of loss Albert can claim in 2012?

• A)$40,000.
• B)$60,000.
• C)$80,000.
• D)$100,000.
• E)None of the above.

---

Definitions:

Property, Plant, Equipment

Long-term assets vital for the operation of a business, not intended for resale but used to generate revenue.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use.

Book Value

The value of an asset as it appears on the balance sheet, calculated by subtracting the accumulated depreciation or amortization from its original cost.

Significant Improvements

Upgrades or enhancements made to a company's assets, typically tangible fixed assets, that are expected to extend the asset's useful life, increase its value, or boost productivity.