Domenico Enterprises purchased land for $2,000,000 in 1999.In 2016, an independent appraiser assessed the value at $4,400,000.What amount should appear on the financial statements in 2016 with respect to the land?

Question

Quizplus · Accepted Answer

Under generally accepted accounting principles (GAAP), land is recorded at its historical cost. Therefore, despite the appraisal value, the land should be reported at its purchase price of $2,000,000.

Domenico Enterprises Purchased Land for $2,000,000 in 1999