Answer:
The financial statements balance for land will be 2,000,000
Under the Cost and conservatism principles.
Explanation:
Property, Plant and Equipment are valued at cost.
The financial statements balance for land will be 2,000,000
Under the GAAP this should be the principles to explaing this reasoning:
Conservatism principle: Revenues, Gains and assets only when you are sure that they will occur. The land is not for sale, and it is not expected to be sold so the potencial gain for selling or valuation should not be recorded.
Cost principle: The bookkepper should post at their original purchase costs.
