Jordan Company Exchanged a Used Autograph-Signing Machine with Rodman Company

question 50

Multiple Choice

Jordan Company exchanged a used autograph-signing machine with Rodman Company for a similar machine with less use. Jordan's old machine originally cost $50,000 and had accumulated depreciation of $40,000, as well as a market value of $40,000, at the time of the exchange. Rodman's old machine originally cost $60,000 and at the time of the exchange had a book value of $30,000 and a market value of $32,000. Rodman gave Jordan $8,000 cash as part of the exchange. The exchange lacked commercial substance. Jordan should record the cost of the new machine at

• A) $8,000.
• B) $10,000.
• C) $16,000.
• D) $32,000.

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Definitions:

Centralized

A decision-making framework in organizations where authority and responsibility are concentrated at a single point or within a small group, typically within the upper levels of management.

Spans

Refers to the scope or range of control that a manager has over a number of subordinates or the extent of a process or activity.

Decentralized

A system or organization where decision-making power is distributed among multiple units or levels, rather than concentrated at a single point.

Integration

The process of combining or coordinating separate elements into a unified whole, often used in technical and organizational contexts.