On May 19, Integrity Repair Service extended an offer of $335,000 for land that had been priced for sale at $363,000. On June 4, Integrity Repair Service accepted the seller’s counteroffer of $345,000. On October 10, the land was assessed at a value of $290,000 for property tax purposes. On February 5 of the next year, Integrity Repair Service was offered $380,000 for the land by a national retail chain. At what value should the land be recorded in Integrity Repair Service’s records?
Answer:
$345,000. Under the cost concept, the land should be recorded at the cost to Integrity Repair Service.