On Jan. 2, 2010, Sivan Corporation acquires a truck for $500,000. Cash of $400,000 is paid and a note payable for the remaining $100,000 was signed at acquisition. The truck is depreciated over a 10 year period at $50,000 per year. What is the historical cost recorded on the year-end 2013 balance sheet?

Question

Quizplus · Accepted Answer

The historical cost of an asset is the original cost at which it was acquired. In this case, the truck was acquired for $500,000, which is the historical cost recorded on the balance sheet. Depreciation affects the book value, not the historical cost.

On Jan 2, 2010, Sivan Corporation Acquires a Truck for $500,000