Reference no: EM132960968

Problem 1: The cost of land typically includes the purchase price and all of the following costs except

a. grading, filling, draining, and clearing costs.

b. street lights, sewers, and drainage systems cost.

c. private driveways and parking lots.

d. assumption of any liens or mortgages on the property.

Problem 2: If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on

a. the significance of cost allocated to the building in relation to combined cost of the lot and building.

b. the length of time for which the building was held prior to its demolition.

c. the contemplated future use of the parking lot.

d. the intention of management for the property when the building was acquired.

Problem 3: Fences and parking lots are reported on the statement of financial position as

a. current assets.

b. land improvements.

c. land.

d. equipment.