Question 1.1: Cost Concept On August 25, Gallatin Repair Service extended ......

Financial Accounting [EXP-43430]

Cost Concept

On August 25, Gallatin Repair Service extended an offer of $125,000 for land that had been priced for sale at $150,000. On September 3, Gallatin Repair Service accepted the seller’s counteroffer of $137,000. On October 20, the land was assessed at a value of $98,000 for property tax purposes. On December 4, Gallatin Repair Service was offered $160,000 for the land by a national retail chain. At what value should the land be recorded in Gallatin Repair Service’s records?

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$137,000. Under the cost concept, the land should be recorded at the cost to Gallatin Repair Service.

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