Question

Martin corporation purchased land in 2007 for $290,000. in 2015, it purchased a nearly identical parcel of land for $460,000. in its 2015 balance sheet, martin valued these two parcels of land at a combined value of $920,000. by reporting the land in this manner, martin corp. has violated the

Answer 1

Martin has violated the balance sheet rule that dictate that as you carry out calculations for fixed asset, you should list the gross buying price of an asset and later state its appreciation value.

Martin, thus, could have stated the initial value of the land and then highlighted the appreciation over the years.