Asked by Oppong Bright on May 10, 2024
Verified
Refer to Exhibit 10-1.After the exchange, Fargo should record its newly acquired land on its books at
A) $300, 000
B) $400, 000
C) $450, 000
D) $500, 000
Appraised Fair Value
The estimated market value of an asset based on the judgment of a qualified appraiser at a specific time.
Cost
The value of economic resources used or the amount of expenditure incurred to acquire or produce a good or service.
Book Value
The net value of an asset as recorded on the balance sheet, calculated by subtracting any associated depreciation or amortization from its cost.
- Acquire knowledge on how to handle and record journal entries for the exchange of like and unlike assets in accounting.
- Acquire knowledge on the fair value concept and its utilization in asset trades.
Verified Answer
LW
Lauryn williamsMay 13, 2024
Final Answer :
C
Explanation :
Fargo should record the newly acquired land at its fair value, which is $450,000. The cash received does not affect the recorded value of the land acquired.
Learning Objectives
- Acquire knowledge on how to handle and record journal entries for the exchange of like and unlike assets in accounting.
- Acquire knowledge on the fair value concept and its utilization in asset trades.