Hoot Enterprises buys a warehouse for $590,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal shows a value of $650,000 for the warehouse. The seller had originally purchased the building for $480,000. Hoot has a similar warehouse on the West Coast that has a book value of $603,000. Under the historical cost principle, Hoot should record the building for OA. $650,000. OB. $480,000. OC. $590,000. OD. $603,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Hoot Enterprises buys a warehouse for $590,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal
shows a value of $650,000 for the warehouse. The seller had originally purchased the building for $480,000. Hoot has a similar warehouse on the West
Coast that has a book value of $603,000. Under the historical cost principle. Hoot should record the building for
OA. $650,000.
OB. $480,000.
OC. $590,000.
OD. $603,000.
☀
Transcribed Image Text:Hoot Enterprises buys a warehouse for $590,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal shows a value of $650,000 for the warehouse. The seller had originally purchased the building for $480,000. Hoot has a similar warehouse on the West Coast that has a book value of $603,000. Under the historical cost principle. Hoot should record the building for OA. $650,000. OB. $480,000. OC. $590,000. OD. $603,000. ☀
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