If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000,is offered for sale at $150,000,is assessed for tax purposes at $95,000,is considered by the purchaser as easily being worth $140,000,and is purchased for $137,000,the land should be recorded in the purchaser's books at:

Question

Quizplus · Accepted Answer

The land should be recorded at cost, which in this case is $137,000 - the price the purchaser paid for the land. The other values (such as assessed value and the seller's original purchase price) are not relevant to the cost of the land to the purchaser.

If a Company Is Considering the Purchase of a Parcel