In preparing financial statements to accompany a loan application for a local bank, Mary Jones was unsure
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In preparing financial statements to accompany a loan application for a local bank, Mary Jones was unsure about the proper reporting of a piece of land purchased by the company ten years ago. The land was purchased for $10,000, but recently, similar parcels of land in the area sold for between $25,000 and $40,000.
a. If you were a CPA auditing Mary’s books, what amount would you insist that she disclose for the land value?
b. What amount would Mary probably prefer?
c. What amount would the bank find to be most useful?
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