Makemore Company purchases a factory for $800,000 . The purchase price is properly allocated 90% to the building and 10% to the land. In the first year, Makemore adds a storage shed to the building at a cost of $8,000 . The utility company pays Makemore $1,500 for an easement to run utility lines across the land. A total depreciation of $45,000 is deducted over the 3 years. Determine the adjusted
basis of the building and the land as of the end of year 3:
a. $728,000 building; $78,500 land
b. $683,000 building; $80,000 land
c. $683,000 building; $78,500 land
d. $728,000 building; $80,000 land
c
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What approach is often most effective when the audience is not expecting a proposal?
A) Sales proposal B) Persuasive approach C) RFP D) Direct approach E) Indirect approach
The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors, except
A. the desire to get consulting work from the company because most audit firms also do consulting work. B. the failure of U.S. audit firms to follow internationally accepted accounting standards. C. the fact that auditors are appointed by the firm. D. the desire to get future auditing contracts from the company.
Which of the following statements about the balanced scorecard approach is true?
A) It helps management focus on only nonfinancial measures of performance. B) It helps management focus on critical success factors which may be financial and nonfinancial in nature. C) It helps management ignore short-term operating performance in favor of long-term operating performance. D) It helps management focus on only financial measures of performance.
Which of the following is most likely to constitute fraud?
a. A false prediction that a painting's value will rise. b. A false statement that a used car is "the best deal in town." c. A false statement that a $30,000 car attracts members of the opposite sex. d. Silence as to a toxic waste problem on real property that the buyer would not reasonably find.