contestada

Byrde Company purchased a truck. The seller asked for $11,000, but Byrde paid only $10,000 after negotiation. The owner of Byrde Company believes he got a great deal and the truck is really worth $15,000. What amount does Byrde record on its financial statements for the truck

Respuesta :

anthougo

Answer:

Byrde Company

The amount that Byrde should record on its financial statements for the truck is:

= $10,000.

Explanation:

a) Data and Calculations:

Seller's asking price = $11,000

Amount paid after negotiation = $10,000

Fair price for the truck = $15,000

b) The amount to be recognized or recorded by Byrde on its financial statements for the truck is the cost price, that is, the amount that Byrde paid actually for the truck. The fair price cannot be recognized, since GAAP does not allow for noncurrent assets to be recognized at their fair prices. The historical cost is objective and verifiable, unlike the $15,000 fair price or the seller's asking price.

The amount that should be recorded on the financial statement for the truck is $10,000.

Given that,

  • The asked value is $11,000.
  • The Company paid the amount of $10,000.
  • The great deal amount should be $15,000.

Since the truck was purchased for $10,000 so the same amount should be recorded on the financial statements.

Therefore we can conclude that the amount that should be recorded on the financial statement for the truck is $10,000.

Learn more about the financial statement here: brainly.com/question/14951563

Ver imagen andromache

Otras preguntas