Martin Corporation purchased land in 2010 for $290,000. In 2018, it purchased a nearly identical parcel of land for $460,000. In its 2018 balance sheet, Martin valued these two parcels of land at a combined value of $920,000. By reporting the land in this manner, Martin Corp. has violated the

Question

Quizplus · Accepted Answer

Martin Corporation has violated the historical cost principle by not reporting the land at its original cost. Instead, it has reported it at a combined value of $920,000, which is higher than its original cost.

Martin Corporation Purchased Land in 2010 for $290,000