Gommert Co. purchased land and a building for $425,000. The appraised values of the land and the building were
$150,000 and $450,000, respectively. In addition, the attorney was paid $10,000 for handling the closing on the property.
A. What amounts will be recorded as the costs of the land and building?
B. What is the accounting justification against increasing the land and building accounts for their appraised values?

Question

Quizplus · Accepted Answer

The Answer of Gommert Co. purchased land and a building for $425,000. The appraised values of the land and the building were
$150,000 and $450,000, respectively. In addition, the attorney was paid $10,000 for handling the closing on the property.
A. What amounts will be recorded as the costs of the land and building?
B. What is the accounting justification against increasing the land and building accounts for their appraised values?