Question

Hernandez Corporation purchases a building for $300,000 cash. The building was appraised at $310,000. The tax assessment on the building was $280,000. Three months after purchasing the building, Company Z offers Hernandez $320,000 for the building. At what amount should the building be reported in Hernandez's financial statements according to the historical cost principle

Answer 1

$300,000

Step-by-step explanation:

Based on the information given we were told that the Corporation purchases a building for the amount of $300,000 in which the building purchased was paid in cash, this means that the amount that the building should be reported in Hernandez's financial statements according to the historical cost principle will be the cost of purchasing the building which is the amount of $300,000.