Cost Concept On May 19, Obermayer Repair Service extended an offer of $167,000 f
ID: 2604624 • Letter: C
Question
Cost Concept
On May 19, Obermayer Repair Service extended an offer of $167,000 for land that had been priced for sale at $190,000. On June 4, Obermayer Repair Service accepted the seller's counteroffer of $181,000. On October 10, the land was assessed at a value of $272,000 for property tax purposes. On February 5 of the next year, Obermayer Repair Service was offered $290,000 for the land by a national retail chain.
At what value should the land be recorded in Obermayer Repair Service's records?
$
Explanation / Answer
Answer = $181,000
As according to the cost concept Asset should be recorded at Cost to Obermayer Repair Service and they accepted 181,000 (Seller's counteroffer), So the asset should be recorded at 181,000