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:

Sample Size

It refers to the number of observations or individuals taken from a population for the purpose of statistical analysis.

Population Standard Deviation

An indicator of the extent of variability or spread within a complete set of data points in a population.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values deviate from the mean of the set.

Mean Purchase

The average value or amount of purchases made over a specific period of time.