Otay Company purchased land for $70,000 on 12/31/09

Accounting Mar 18, 2021

Otay Company purchased land for $70,000 on 12/31/09. As of 5/30/10, the land's value had increased to $71,500. On 12/31/10, the land was appraised for $74,000. The Land account should be increased by

a. $1,150.

b. $0.

c. $2,500.

d. $4,000.

Expert Solution

Answer:

b .

Step-by-Step explanation

The assets are not shown on the increased value it is shown on the lower of cost or market value, the increase in the value of land will be recognized when it actually sold.

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