Giant Green Company pays $3,000,000 for a tract of land with two buildings on it.It plans to demolish Building 1 and build a new store in its place.Building 2 will be a company office; it is appraised at $742,000,with a useful life of 25 years and a $75,000 salvage value.A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $400,500 that are expected to last another 18 years with no salvage value.Without the buildings and improvements,the tract of land is valued at $2,020,600.Giant Green also incurs the following additional costs:

-What is the amount that should be recorded for Building #2?
A) $600,200
B)$742,000
C)$667,000
D)$703,800
E)$487,921

Question

Giant Green Company pays $3,000,000 for a tract of land with two buildings on it.It plans to demolish Building 1 and build a new store in its place.Building 2 will be a company office; it is appraised at $742,000,with a useful life of 25 years and a $75,000 salvage value.A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $400,500 that are expected to last another 18 years with no salvage value.Without the buildings and improvements,the tract of land is valued at $2,020,600.Giant Green also incurs the following additional costs:

-What is the amount that should be recorded for Building #2?

-What is the amount that should be recorded for Building #2?
A) $600,200 
B)$742,000 
C)$667,000 
D)$703,800 
E)$487,921

Quizplus · Accepted Answer

The Answer of Giant Green Company pays $3,000,000 for a tract of land with two buildings on it.It plans to demolish Building 1 and build a new store in its place.Building 2 will be a company office; it is appraised at $742,000,with a useful life of 25 years and a $75,000 salvage value.A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $400,500 that are expected to last another 18 years with no salvage value.Without the buildings and improvements,the tract of land is valued at $2,020,600.Giant Green also incurs the following additional costs:

-What is the amount that should be recorded for Building #2?
A) $600,200 
B)$742,000 
C)$667,000 
D)$703,800 
E)$487,921

Giant Green Company Pays $3,000,000 for a Tract of Land