Birken Co.purchased a building for $600,000 in 2004.At the end of 2016, when it had a book value of $450,000, it was appraised for $1,000,000.A potential buyer offered $900,000.Birken rejected the offer.What amount should is recorded on Birken's records at the end of 2016 in the account called Buildings?
A) $2,000,000
B) $800,000
C) $500,000
D) $350,000

Question

Quizplus · Accepted Answer

The book value of the building at the end of 2016 was $450,000, which should be recorded in the Buildings account. The fact that it was appraised for $1,000,000 and offered $900,000 does not impact the recorded value of the asset on the balance sheet. Therefore, the correct amount to record on Birken's records in the Buildings account at the end of 2016 is $450,000.

Birken CoPurchased a Building for $600,000 in 2004