1.

Fitness Department purchased a building on a tract of land and allocated the entire cost of the purchase to building. Normally the company depreciates buildings over 40 years using the straight-line method with zero residual value and does not depreciate land. What is the impact of the improper accounting treatment of the purchase on the company's net income for the life of the building?

a.understated

b.overstated

c.unaffected

d.indeterminable from the information provided

2. The method of depreciation used most frequently is the ______ method.