The Dulce Company has five plants nationwide that cost a total of $200 million. The current fair value of the plants is $600 million. The plants will be recorded and reported as assets at

Question

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The plants will be recorded and reported at their historical cost, which is $200 million, not their current fair value. This is in accordance with the historical cost principle in accounting, which states that assets should be recorded at their cost at the time of acquisition.

The Dulce Company Has Five Plants Nationwide That Cost a Total