Hoot Enterprises buys a warehouse for $590,000 to use for its East Coast distributionoperations. On the date of the purchase, a professional appraisal shows a value of $650,000for the warehouse. The seller had originally purchased the building for $480,000. Hoothas a similar warehouse on the West Coast that has a book value of $603,000. Under thehistorical cost principle, Hoot should record the building fora. $650,000.b. $480,000.c. $590,000.d. $603,000.
Hoot Enterprises buys a warehouse for $590,000 to use for its East Coast distributionoperations. On the date of the purchase, a professional appraisal shows a value of $650,000for the warehouse. The seller had originally purchased the building for $480,000. Hoothas a similar warehouse on the West Coast that has a book value of $603,000. Under thehistorical cost principle, Hoot should record the building fora. $650,000.b. $480,000.c. $590,000.d. $603,000.
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 42P
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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.
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