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kherson [118]
3 years ago
8

Eight years ago, Bravo Company purchased land for $170, 000. The current fair market value of the land is $421,000. The rate of

general inflation experienced during the 8-year period has averaged 10% per year. At the time the land was purchased, Bravo intended to hold it for 20 years. At what amount should the land be carried on Bravo's books today
Business
1 answer:
victus00 [196]3 years ago
4 0

Answer: $170,000

Explanation:

According to the historical cost concept, the original cost value of a asset (i.e. land) should be recorded in the books. The original cost refers to the cost of a asset at the time of purchasing. As per the principle of historical cost, assets are always recorded as a original cost or historical cost or acquisition cost.

But when a person sold the asset then he will consider the fair market value.

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All of the following statements related to preparation of the statement of cash flows under U.S. GAAP and IFRS are true except:
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3 years ago
Suppose a riskless project requires an initial investment of $10 and will generate a one-time cash inflow of $30 two years later
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Answer:

D. The payback period is less than 2 years.

Explanation:

Discount rate                 5%  

                                        0      1          2

intital investment        -10  

cash flow                       0        30

Total cash flow         -10      0        30

NPV                        17.21  

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July 15 Declared a cash dividend payable to common stockholders of $169,000. Aug. 15 Date of record is August 15 for the cash di
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Answer:

Explanation:

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    To Dividend payable    $169,000

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No journal entry is required on the date of declared

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Dividend payable A/c    $169,000

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(Being dividend is paid is recorded)

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