Ten years ago a corporation purchased a building for $100,000.At that time,the corporation felt that the business was worth $125,000.The current market value of the business is $500,000.The building has been assessed at $475,000 for property tax purposes.At which amount should the corporation record the building in its accounting records?

Question

Quizplus · Accepted Answer

The building should be recorded at its historical cost of $100,000, as per the cost principle in accounting.

Ten Years Ago a Corporation Purchased a Building for $100,000