When a company purchases land with a building on it and immediately tears down the building so that the land can be used for the construction of a plant, the cost incurred to tear down the building should be

Question

Quizplus · Accepted Answer

The cost incurred to tear down the building is added to the cost of the land because it is necessary to prepare the land for its intended use. These costs are considered part of the land acquisition cost.

When a Company Purchases Land with a Building on It