At what value should the land be recorded in Carpet Barn Company's records?
On May 7, Carpet Barn Company offered to pay $72,520 for land that had a selling price of $90,000. On May 15, Carpet Barn accepted a counteroffer of $86,190. On June 5, the land was assessed at a value of $100,000 for property tax purposes. On December 10, Carpet Barn Company was offered $133,610 for the land by another company. At what value should the land be recorded in Carpet Barn Company's records?
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A historical cost is a measure of value used in accounting in which the value of an asset on the balance sheet is recorded at its original cost when acquired by the company.
A fixed asset is a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income.
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