1. John bought a building a few years ago for $500,000. Currently, the building is worth about $700,000, but the balance sheet still shows $500,000 as the cost of the building. John asks why the balance sheet shows the original cost. What do you tell him?
Balance sheets reflect historical value on many items, not current market values.
Call your accountant right away because the balance sheet shows the incorrect value.
Look at the cash account to find the difference in value.
68%
