Question

Julia is preparing the balance sheet for her company. building and land are the only two assets classified as property, plant, and equipment, and each cost $60,000 dollars at purchase. the building has accumulated depreciation of $12,000. how should julia list this information on the balance sheet

Answer 1

Land and equipment are considered as fixed assets. As such, Julia should enter the two in long term fixed assets column and list their current values.

Short term assets
Long term fixed assets
Gross value of building
- Total depreciation value.

Over time though, she should carry out valuation to have a true picture of how the land has appreciated in value.