Question

Ten years ago a corporation purchased a building for​ $160,000. at that​ time, the corporation felt that the building was worth​ $185,000. the current market value of the building is​ $430,000. the building has been assessed at​ $405,000 for property tax purposes. at which amount should the corporation record the building in its accounting​ records?

Answer 1

The building should be recorded in the corporation's account records as $405,000 because of it's assessed value for property tax purposes. The worth of the building ten years ago as well as the amount the corporation paid for it at that time no longer matters, and the current market value of the building also does not matter if the building is not being sold.