Ask Question
16 December, 23:55

Sunland Company purchased land in 2010 for $303000. In 2018, it purchased a nearly identical parcel of land for $475000. In its 2018 balance sheet, Martin valued these two parcels of land at a combined value of $948000. By reporting the land in this manner, Sunland Co. has violated the:

+2
Answers (1)
  1. 17 December, 01:51
    0
    Historical cost principle

    Explanation:

    According to the historical cost principle, the value of fixed assets should be recorded at the book value or the purchase price.

    Since in the question, the martin valued the land of $948,000 which is a total of the purchased amount and the parcel of land.

    The land should be recorded for $303,000, not for $948,000

    So, it violates the historical cost principle
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Sunland Company purchased land in 2010 for $303000. In 2018, it purchased a nearly identical parcel of land for $475000. In its 2018 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers