In January 2011, Butz Company Exchanged an Old Machine, with a Book

question 45

Multiple Choice

In January 2011, Butz Company exchanged an old machine, with a book value of $156,000 and a fair value of $140,000, and paid $40,000 cash for a similar used machine having a list price of $200,000. The exchange had commercial substance. At what amount should the machine acquired in the exchange be recorded on Butz's books?

• A) $200,000
• B) $196,000
• C) $184,000
• D) $180,000

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Definitions:

Loyalist

A person who remained loyal to the British Crown during the American Revolutionary War, often facing social ostracism or fleeing to British territories as a result.

Yeoman Farmer

A term traditionally used to describe a small landowner or farmer who worked their land independently, primarily in historical contexts.

Anglican Clergyman

A priest or minister in the Anglican Church, which is a tradition within Christianity comprising churches with historical connections to the Church of England.

Patriot

A person who vigorously supports their country and is prepared to defend it against enemies or detractors.