Answered: what is the fair value?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 1:- Solve below the question.

(A)- masa co is considering purchasing a retail shop in the high street. the market value of the shop is $500,000. transaction costs to aquire the shop would be $45000 spendalot co expects to use the shop for a set period of time and the discounted future cash flows from its use are calculated to be $660000 what is the fair value?

1. 660000

2. 545000

3. 500000

4. 455000

(B) - when should an expenditure be recorded as an asset rather than an expenses?

1. never

2. always

3. if the amount is material.

4. when future exists

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