On May 7, Carpet Barn Company Offered to Pay $95,000

question 62

Short Answer

On May 7, Carpet Barn Company offered to pay $95,000 for land that had a selling price of $110,000. On May 15, Carpet Barn accepted a counteroffer of $103,000. On June 5, the land was assessed at a value of $120,000 for property tax purposes. On December 10, Carpet Barn Company was offered $145,000 for the land by another company. At what value should the land be recorded in Carpet Barn Company's records?

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Definitions:

Adverse Opinion

An auditor’s opinion that states that deviations from generally accepted accounting principles are so serious that an unqualified opinion is impossible and a qualified opinion is not justified.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.

FASB

Stands for Financial Accounting Standards Board, an organization responsible for establishing accounting and financial reporting standards for companies and non-profit organizations in the United States.

Ostensible Authority

Occurs when a hospital leads a patient to believe that a physician with staff privileges is an employee of the hospital.