Ramstetter,Inc.,purchased a piece of land with a new building on January 1,20A.The land was valued at $40,000 and the building was valued at $120,000 with a 40 year life and a zero salvage (residual)value.How would the land and building appear in the plant,property and equipment section of the December 31,20A,statement of financial position?

Question

Quizplus · Accepted Answer

The land is recorded at its purchase value of $40,000. The building is recorded at its purchase value of $120,000, and since it has been a year, it would have accumulated depreciation of $3,000 ($120,000 / 40 years).