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Question

Hoot Enterprises buys a warehouse for $590,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal shows a value of$650,000 for the warehouse. The seller had originally purchased the building for $480,000. Hoot has a similar warehouse on the West Coast that has a book value of$603,000. Under the historical cost principle, Hoot should record the building for

a. $650,000.

b.$480,000.

c. $590,000.

d.$603,000.

Solution

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Answered 11 months ago
Answered 11 months ago
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In this exercise, we will determine how the building shall be recorded in the books of the buyer.

Let us analyze the given choices and choose the correct answer.

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