When a company purchases land with a building on it and immediately tears down thebuilding so that the land can be used for the construction of a plant, the costs incurredto tear down the building should be:a. expensed as incurredb. added to the cost of the plantc. added to the cost of the landd. amortized over the estimated time period between the tearing down of thebuilding and the completion of the plan
When a company purchases land with a building on it and immediately tears down thebuilding so that the land can be used for the construction of a plant, the costs incurredto tear down the building should be:a. expensed as incurredb. added to the cost of the plantc. added to the cost of the landd. amortized over the estimated time period between the tearing down of thebuilding and the completion of the plan
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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. expensed as incurred
b. added to the cost of the plant
c. added to the cost of the land
d. amortized over the estimated time period between the tearing down of the
building and the completion of the plan
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