Question

Mason Corporation purchased a piece of land 5 years ago when the price of land was low. It plans to develop the land into a new facility when their current facility reaches its production limit, which it estimates will be in 4 years. On their classified balance sheet, Mason Corporation would classify this land as
A. property, plant, and equipment.
B. an intangible asset.
C. a long-term investment.
D. a current asset.

Answer 1

Answer:  A long term investment

Explanation: In simple words, those assets which are purchased by an organisation with the intent of holding them for more than one year are called long term assets.

Mason is holding the land for five years. Hence, we can say that the land will be classified as long term investment.

It could have been considered as property, plant and equipment but the new facility has not been made yet.