The ACE Company has five plants nationwide that cost $100 million. The current market value of the plants is $500 million. The plants will be recorded and reported as assets at
a. $100 million.
b. $600 million.
c. $400 million.
d. $500 million.

 

Answer:

a.

Step-by-Step explanation

Plant is a fixed asset which has a useful life of more than 1 year. Plant assets are recorded at cost. The depreciation accumulated on them is recorded to the useful life of the asset. These are reported to the tangible assets of the non current assets. Plant assets are also be reviewed for impairment losses. Their market value is used when the asset is to be sold.

Thus, correct answer is a.