9. A company decides to exchange its old machine and 7,000 cash for a new machine. The old machine has a book value of 60,000 and a fair market value of 65,000 on the date of the exchange. The cost of the new machine would be recorded at A. 58,000 C. 67,000 B. 65,000 D. 72,000

Question

9. A company decides to exchange its old machine and 7,000 cash for a new machine. The old machine has a book value of 60,000 and a fair market value of 65,000 on the date of the exchange. The cost of the new machine would be recorded at A. 58,000 C. 67,000 B. 65,000 D. 72,000

Answer 1

To determine the cost of the new machine, we need to calculate the fair market value of the old machine and the cash given up in the exchange.The fair market value of the old machine is

7,000. Therefore, the total amount given up in the exchange is

7,000 =

65,000.Therefore, the correct answer is B. $65,000.

Question

9. A company decides to exchange its old machine and 7,000 cash for a new machine. The old machine has a book value of 60,000 and a fair market value of 65,000 on the date of the exchange. The cost of the new machine would be recorded at A. 58,000 C. 67,000 B. 65,000 D. 72,000

Solution

Resposta