Question

Enterprises buys a warehouse for $ 570 comma 000$570,000 to use for its East Coast distribution operations. On the date of theâpurchase, a professional appraisal shows a value of $ 640 comma 000$640,000 for the warehouse. The seller had originally purchased the building for $ 505 comma 000$505,000. Dill has a similar warehouse on the West Coast that has a book value of $ 584 comma 000$584,000. Under the historical costâ principle, Dill should record the building for

Answer 1

Answer:

$570,000

Explanation:

At the time of recording of the fixed assets, the fixed assets should be reported at purchase cost or historical price  or originally cost or acquiring cost, whether all other values are given i.e appraisal value, the seller purchased value, similar warehouse book value, etc

So, in the given case, it would be recorded at $570,000 as the buyer purchase the building at this cost only.