Question

In 1990, Johnson Company purchased a building for $170,000. In 2020, a real estate professional says the building has a fair value of $1,000,000. In 2020, a similar building down the street recently sold for $900,000. What value, before consideration of accumulated depreciation, is reported for the building on the balance sheet at December 31, 2020?

Answer 1

$170,000.00

Step-by-step explanation:

The amount of $170,000.00 will still be recorded as the value of the building, before considering accumulated depreciation.

Fair value of $1,000,000.00 or selling price of $900,000.00 does not affect the original value of the building in the company's balance sheet.