Seinfeld Company has land with an original cost of $70,000 and a fair market value of $81,000. Seinfeld has considered selling its business next year and listing the land with a realtor for $100,000. At what amount would land be measured on the December 31, 2018 balance sheet?
A)$100,000
B)$81,000
C)$15,000
D)$70,000

Question

Quizplus · Accepted Answer

Under generally accepted accounting principles (GAAP), land and other tangible assets are recorded at their historical cost, not at their fair market value or the price at which the company plans to list them for sale. Therefore, the land would be measured on the balance sheet at its original cost of $70,000.

Seinfeld Company Has Land with an Original Cost of $70,000