Donner Company Is Selling a Piece of Land Adjacent to Their

question 67

Multiple Choice

Donner Company is selling a piece of land adjacent to their business. An appraisal reported the market value of the land to be $120,000. The Focus Company initially offered to buy the land for $107,000. The companies settled on a purchase price of $115,000. On the same day, another piece of land on the same block sold for $122,000. Under the cost concept, what is the amount that will be used to record this transaction in the accounting records?

• A) $107,000
• B) $115,000
• C) $120,000
• D) $122,000

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Definitions:

Psychic Costs

Non-monetary costs related to emotional stress or mental effort involved in undertaking an activity or making a decision.

Fire Protection Program

encompasses the policies, practices, and tools aimed at preventing, mitigating, and responding to fires.

Expected Loss

The anticipated amount of loss or damage assessed in terms of its probability and the severity of the loss.

Insurance Premium

The amount that individuals or organizations pay for an insurance policy to cover risk.