Question

Savings mart is a national retail chain. To entice the company to open a mega store in its jurisdiction, the city of population ville donated a 20-acre tract of land to be used for construction. the land was originally purchased by the city for 250000 three years ago. the appraisal value at the time of the donation was 300000. for what amount should savings mart record the donated land?A) $250,000. B) $275,000 C) $300,000 D) $0: Donated assets are not recorded.

Answer 1

Answer:

$300,000

Explanation:

Given:

Original cost = $250,000

Fair Value = $300,000

Find:

Land would be record

Computation:

If a revenue company accepts some fixed asset as a gift, as per the Internal Revenue Service and GAAP, then the property should be reported at Market Value.

The market value is $300,000 in this situation, so the property must be recorded at $300,000.