A Company Bought New Heating System for $42,000 and Was

question 68

Multiple Choice

A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system,so the company paid $40,000 cash with the trade-in.The old system had an original cost of $37,000 and accumulated depreciation of $34,000.If the transaction has commercial substance,the company should record the new heating system at:

• A)$2,000.
• B)$3,000.
• C)$40,000.
• D)$42,000.
• E)$43,000.

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Definitions:

International Integrated Reporting Committee

An organization that champions the evolution of corporate reporting to articulate value creation over time, integrating financial and non-financial aspects.

GRI

The Global Reporting Initiative, a leading organization that provides a comprehensive sustainability reporting framework used worldwide.

Triple Bottom Line

An accounting framework that incorporates three dimensions of performance: social, environmental, and financial.

Environmental

Pertains to the natural world or the ecological and physical conditions in which an organization operates.