Question

Harper Travel Agency purchased land for $85,000 cash on December 10, 2019. At December 31, 2019, the land’s value has increased to $93,000. What amount should be reported for land on Harper’s balance sheet at December 31, 2019?

Answer 1

Answer:

The amount which should be reported for land on Harper’s balance sheet at December 31, 2019 is $85,000

Explanation:

In this question, the accounting principle is used.  

The historical cost principle is one of the accounting principles which is used for the recording of the assets on the balance sheet.  

Under this principle, the assets are recorded in the purchase price, not by the increased price.

In this principle, the recording of the assets is done based on the amount on which the assets are purchased not by the increased value.  

So, 85,000 should be recorded.

Answer 2

Answer:

This is not an answer but...

Explanation:

Did you know there's an app called Socratic that you take a picture of a question and it searches the web for a source or website with the answer highlighted. I haven't used it before but it might help.