Read the Blackstone Case (case #2 on page 49) and discuss your feelings about the discussion between Amy Clark (President) and Dan Sullivan (accountant). Describe each perspective and then describe your feelings. Comment on other postings.

Case 2. Blackstone, Inc, was in the final phase of a land development project it started earlier in the year. Blackstone, Inc, had acquired 50 acres of raw land for $400,000 and then spent on additional $1,700,000 in land development cost to create a new subdivision with 100 residential lots. With a total cost of $2,100,000 and 100 lots , each lots had a cost of $21,000, however, the lots were listed for sale at $48,000 per lot. Blackstone, Inc., was applying for a business loan and need to provide current financial statement to the bank. Amy Clark, the company president, wanted to report the total current value of the lots, $4,800,000 (100 lots x $48,000 per lot), rather than the total cost currently listed on the balance sheet, $2,100,000. Dan Sullivan, the company accountant, told Amy the lots were inventory and they should be reported on the balance sheet at the $2,100,000 rather than the fair market value.

Should the balance sheet for Blackstone, Inc., list the lots of the total cost of $2,100,000 or the total Selling price of $4,800,000? Could Blackstone, Inc., provide one balance sheet using historical cost and another balance sheet using market value?