Carey Company buys land for €50,000 on 12/31/13. As of 3/31/14, the land has appreciated in value to €50,700. On 12/31/14, the land has an appraised value of €51,600. By what amount should the Land account be increased in 2014?

Question

Quizplus · Accepted Answer

Under the historical cost principle, land is recorded at its purchase price and is not adjusted for changes in market value. Therefore, the Land account should not be increased.

Carey Company Buys Land for €50,000 on 12/31/13