When a Company Purchases Land with a Building on It

question 35

Multiple Choice

When a company purchases land with a building on it and immediately tears down the building so that the land can be used for the construction of a plant,the costs incurred to tear down the building should be

• A) amortized over the estimated time period between the tearing down of the building and the completion of the plant.
• B) expensed as incurred.
• C) added to the cost of the plant.
• D) added to the cost of the land.

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Definitions:

Eastern Bloc

Refers to the group of communist states of Central and Eastern Europe during the Cold War, aligned with the Soviet Union.

Hungary

A landlocked country in Central Europe, known for its rich history, its capital Budapest, and cultural heritage, including contributions to music, literature, and cuisine.

Nikita Khrushchev

A Soviet statesman who led the Soviet Union during part of the Cold War as the First Secretary of the Communist Party from 1953 to 1964 and Chairman of the Council of Ministers (Premier) from 1958 to 1964.