A parcel of corporate land was recently dedicated as the new plant site. What co

Question

A parcel of corporate land was recently dedicated as the new plant site. What cost allocation should the land receive, based on the following: original cost of $270,000, market value of $370,000 net book value of $270,000, a recent offer to purchase for $320,000.

A parcel of corporate land was recently dedicated as the new plant site. What cost allocation should the land receive, based on the following: original cost of $270,000, market value of $370,000 net book value of $270,000, a recent offer to purchase for $320,000.

Explanation / Answer

The correct answer is:

a. $370,000, because as per the accounting rules present market value will be used for the cost allocation.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.