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 the

Question

Quizplus · Accepted Answer

The proper accounting treatment of the cost of the building depends on the intention of management for the property when the building was acquired. If the intention was to demolish the building and use the land for another purpose (like a parking lot), the cost of the building could be considered part of the cost of preparing the land for its intended use.

If a Corporation Purchases a Lot and Building and Subsequently