Question

intext:"If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is considered by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at"

Answer 1

the seller must record the land at the purchase price = $137,000

Step-by-step explanation:

Fixed assets like land must always be recorded at historical cost. This is specially important regarding land because it doesn't depreciate and its carrying value will always be the purchase cost since it cannot be adjusted if the fair market value changes.