A Company Bought a New Display Case for $42,000 and Was

question 44

Multiple Choice

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

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

---

Definitions:

Premium

An amount paid in excess of the nominal or face value, often in relation to insurance or bonds.

Tax Deductible

Expenses or payments that can be subtracted from gross income to reduce the amount of income subject to taxation.

Term Bonds

Bonds that have a fixed maturity date on which the principal amount is due to be paid back to investors in full.

Serial Bonds

Bonds issued by a corporation or government that are scheduled for repayment at a series of future dates.