A construction company paid $80,000 cash for land used in the business. At the time of purchase, the land had a list price of $89,000. When the balance sheet was prepared, the fair value of the land was $82,000. At what amount should the land be reported on the balance sheet of the company?

Question

Quizplus · Accepted Answer

The land should be reported at its historical cost, which is the amount paid for it, $80,000.

A Construction Company Paid $80,000 Cash for Land Used in the Business