Donner Company is selling a piece of land adjacent to its business premises.An appraisal reported the market value of the land to be $220,000.The Focus Company initially offered to buy the land for $177,000.The companies settled on a purchase price of $212,000.On the same day,another piece of land on the same block sold for $232,000.Under the cost concept,at what amount should the land be recorded in the accounting records of Focus Company?

Question

Quizplus · Accepted Answer

Under the cost concept, assets should be recorded at their purchase price. Therefore, the land should be recorded at the settled purchase price of $212,000.

Donner Company Is Selling a Piece of Land Adjacent to Its