• Tomassi Company paid $450,000 to acquire a piece of real estate consisting of land and an office building with a parking lot. In this situation:
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• a. The purchase price should be apportioned among the Land, Land Improvement, and Building accounts.
• b. The entire purchase price should be debited to the Land account only.
• c. Land, Land Improvement, and Building accounts should each be credited for the respective appraisal value of each item.
• d. Allocation of the entire $450,000 to Land results in an understatement of net income in the current and future accounting periods.