When an entity 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 cost incurred to tear down the building shall be  Expensed as incurred Amortized over the estimated time period between the tearing down of the building and the completion of the plant Added to the cost of the land Added to the cost of the plant

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 3PB: During the current year, Alanna Co. had the following transactions pertaining to its new office...
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When an entity 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 cost incurred to tear down the building shall be 

  • Expensed as incurred
  • Amortized over the estimated time period between the tearing down of the building and the completion of the plant
  • Added to the cost of the land
  • Added to the cost of the plant
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