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Cantor Corporation acquired a manufacturing facility on four acres of land for a lump-sum price of $8,000,000. The building included used but functional equipment. According to independent appraisals, the fair values were $4,500,000, $3,000,000, and $2,500,000 for the building, land, and equipment, respectively. The initial values of the building, land, and equipment would be:   Building   Land   Equipment a. $ 4,500,000     $ 3,000,000     $ 2,500,000   b. $ 4,500,000     $ 3,000,000     $ 500,000   c. $ 3,600,000     $ 2,400,000     $ 2,000,000   d. None of these answer choices are correct.  

Assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year?

Which of the following is not a land improvement?

An asset’s book value is computed as its original cost minus residual value, less accumulated depreciation.

Demolition costs to remove an old building from land purchased as a site for a new building are considered part of the cost of the new building.

A company purchased a 3-acre tract of land for a building site for $350,000. The company demolished the old building at a cost of $12,000, but was able to sell scrap from the building for $1,500. The cost of title transfer was $900 and attorney fees for reviewing the contract was $500. Property taxes paid were $3,000, of which $250 covered the period after the purchase date. The capitalized cost of the land is:

A gain is recognized on the disposal of an asset when the asset’s book value is greater than the consideration received.

The factors that need to be determined to compute depreciation are an asset’s:

Testing of new equipment should be included in the initial cost of the equipment on the balance sheet.

The cost of an intangible asset with a finite useful life is amortized.