Homework Answers
ANSWER : $ 300 MILLION
Cost principle states that assets, liabilities and equity should be recorded in its historical cost. Historical cost is the amount paid to acquire an asset.
Fixed assets are not shown in the financial statements at their market value because, as per going concern concept, the assets are not going to be sold in the near future. So market value is irrelevant. So the plant will be reported as asset at $300 million of cost.
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