Question

Teshin Co. purchases a piece of land with several land improvements for $180,000. The land appraisers at $120,000 and the land improvements appraise at $80,000. The land should be recorded at what cost

Answer 1

$180,000

Step-by-step explanation:

According to the historical cost principle, the land should be recorded at purchase price or acquisition price whether appraisal value is also given but it always recorded at historical price at which the land is purchased

In the given case, a piece of land is purchased for $180,000 and the appraisal value is also given so for recording the land value, we recorded at the $180,000 only.