1. Cotton Hotel Corporation recently purchased Emporia Hotel and the land on whi the plan to tear down the Emporia Hotel and build a new luxury hotel on the site. The cost of the Emporia Hotel should be A. capitalized as part of the cost of the new hotel. capitalized as part of the cost of the land. C. written off as a loss in the year the hotel is torn down. D. depreciated over the period from acquisition to the date the hotel is scheduled to be torn down. 2. Fences and parking lots are reported on the balance sheet as A. property and equipment. B. current assets. land improvements. D. land. The period of time during which interest must be capitalized ends when the asset is substantially complete and ready for its intended use. B. the asset is fully depreciated. C. the activities that are necessary to get the asset ready for its intended use have begun. D. no further interest cost is being incurred. 4. When a company purchases land as a site for a plant, interest costs capitalized during the period of construction are part of the: A. period cost. B. cost of acquisition. cost of the plant. D. cost of the land. 5. When a plant asset is acquired by issuance of common stock, the cost of the plant asset is properly measured by the A. stated value of the stock. market price of the stock. par value of the stock. D. book value of the stock. 6. An improvement made to a machine increased its fair value and its production capacity by 25% without extending the machine's useful life. The cost of the improvement should be A. expensed. B. debited to accumulated depreciation. capitalized in the machine account. D. allocated between accumulated depreciation and the machine account. 7. The cost of land typically includes the purchase price and all of the following costs except A. assumption of any liens or mortgages on the property. B. street lights, sewers, and drainage systems cost. C. grading, filling, draining, and clearing costs. private driveways and parking lots