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Land was acquired in 2021 for a future building site at a cost of $41,600. The...

Land was acquired in 2021 for a future building site at a cost of $41,600. The assessed valuation for tax purposes is $27,000, a qualified appraiser placed its value at $49,500, and a recent firm offer for the land was for a cash payment of $44,400. The land should be reported in the financial statements at:

  • $27,000.

  • $49,500.

  • $41,600.

  • $44,400.

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Answer #1

Your required answer is option C i.e. $41,600

Explanation:

Building is recorded in financial statement at their cost under Property, Plant and Equipment and therefore it would be recorded at $41,600.

Note: Given remaining valuations and prices in question is just to confuse the student.

I hope this clear your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

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