Hume Lodgings purchased a motor vehicle at a cost of $40 000.Its carrying amount is $12 000 and its fair value is assessed to be $10 000.Sinclair Ltd purchased the motor vehicle from Hume Lodgings for $14 000.What value is recorded for this motor vehicle in the balance sheet of Sinclair Ltd?

Question

Quizplus · Accepted Answer

When Sinclair Ltd purchases the motor vehicle, it is recorded at the purchase price of $14,000 on its balance sheet, regardless of the vehicle's previous carrying amount or fair value.

Hume Lodgings Purchased a Motor Vehicle at a Cost of $40