1) Minor Company purchased land which is being prepared for the construction of a new office building. Which of the following should be included in the cost of the land?

A) cost of removing an old building

B) cost of clearing and grading the land

C) cost of the fence which surrounds the property

D) A and B

2) Land, a building and equipment are acquired for a lump sum of $800,000. The market values of the land, building and equipment are $400,000, $900,000 and $300,000, respectively. What is the cost assigned to the equipment? (Do not round any intermediary calculations, and round your final answer to the nearest dollar.)

A) $0

B) $150,000

C) $300,000

D) $800,000

3) The depreciation process follows the ________ principle.

A) revenue recognition

B) expense recognition

C) disclosure

D) consistency