Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

Exercise 48

Shoppers' Market purchased for $265,000 a site on which it planned to build a new store. The site consisted of three acres of land and included an old house and two barns. County property tax records showed the following appraised values for this property: land, $160,000; buildings, $40,000. Indicate what Shoppers' should do with this $265,000 cost in its financial statements, and explain your reasoning.