Land with a building on it is bought for $2,000,000 at a time when the market value
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Question:
Land with a building on it is bought for $2,000,000 at a time when the market value of the land is $1,000,000 and the market value of the building is $400,000. Which of the following is correct?
Multiple Choice
None of the other alternatives are correct
Each asset would be set up at $1,000,000
No depreciation will be taken on the building until such time as the market value drops below book value
The two assets would be recorded at $1,000,000 and $400,000respectively
The assets would be shown together on the balance sheet as a single asset "Land & Building" at $2,000,000
Related Book For
Fundamental Financial Accounting Concepts
ISBN: 978-0078025907
9th edition
Authors: Thomas Edmonds, Christopher Edmonds
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