ACC 304 Course Great Wisdom / tutorialrank.com ACC 304 Course Great Wisdom / tutorialrank.com | Page 105

d. assumption of any liens or mortgages on the property.

27. 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

a. the significance of the cost allocated to the building in
relation to the combined cost of the lot and building.

b. the length of time for which the building was held prior to
its demolition.