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Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $218,051. The Focus Company initially offered to buy the land for $179,767. The companies settled on a purchase price of $210,991 the same day, another piece of land on the same block sold for $234,159. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company?
a. $218,051
b. $179,767
b. $210,991
c. $234,159

Respuesta :

sandlee09

Answer:

b. $210,991

Explanation:

Based on the information provided within the question and the Cost Concept it can be said that the amount that should be recorded in the accounting records of Focus Company is that of $210,991. This is because the Cost Concept (Principle) states that numbers recorded in accounting records or financial statements should only be actual numbers from completed transactions made in a set period of time. Therefore, since the completed purchase price was that of $210,991, then that is the price that needs to be recorded in the records.

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