Land Was Acquired in 2013 for a Future Building Site

question 13

Multiple Choice

Land was acquired in 2013 for a future building site at a cost of $40,000. The assessed valuation for tax purposes is $27,000, a qualified appraiser placed its value at $48,000, and a recent firm offer for the land was for a cash payment of $46,000. The land should be reported in the financial statements at:

• A)$40,000.
• B)$27,000.
• C)$46,000.
• D)$48,000.

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Definitions:

Setup Cost

The expenses incurred in preparing equipment or processes for manufacturing an order or batch of products.

Annual Demand

The total quantity of a product or service that consumers are willing and able to purchase over a year.

Safety Stock

Additional quantity of an item held in inventory to reduce the risk of stockouts caused by variability in supply or demand.

Stockouts

Occurrences when demand exceeds supply, resulting in an inability to fulfill customer orders or requirements immediately.