lpine Company solicited bids from several contractors to construct an addition to its office building. The lowest bid received was for $1,200,000. Alpine decided to construct the addition itself at a cost of $1,100,000. What amount should be recorded in the building account?

Alpine company has asked for bids from various contractor to construct additions in its office building. many contractors replied with a bid offer among which the lowest was $1,200,000. Alpine decided to construct additions itself at a lower cost than the bid received. The amount which is recorded in office building account will be $1,100,000 at which the company has agreed to construct. The accounts of a company should reflect actual expenditures so the amount of $1,100,000 will be actual expenditure of construction which Alpine Company has determined.

abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2021-11-23T17:12:51+01:00

The amount that should be recorded in the building account is $1,100,000.

Building is a fixed asset which are use for business operation by companies or organizations so as to earn or generate profit for their business.

Based on the information given we were told that the company construct the building at a cost of $1,100,000.

Which means that the building cost of the amount of $1,100,000 should be recorded in the building account as this is the actual amount that was spent to construct an addition to the building.

Inconclusion the amount that should be recorded in the building account is $1,100,000.

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