Use the Following Data for Questions 10 Through 17

question 79

Multiple Choice

Use the following data for questions 10 through 17. Each question is independent of the other questions.
Sawyer Corporation has a machine (Machine A) that it acquired on 1/1/14 for $540,000. On 12/31/14 such machines have a selling price and fair value of $621,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.
Brown Corporation has a machine (Machine B) that it acquired on 1/1/14 for $729,000. On 12/31/14 such machines have a selling price and fair value of $540,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.
On 12/31/14 Brown gave Machine B plus $81,000 cash to Sawyer in return for
Machine A.
-A replacement, which extended the life but did not increase the quality of units produced by the asset, cost $15,000.

• A) Asset(s) only.
• B) Accumulated amortization, or depletion or depreciation only.
• C) Expense only.
• D) Asset(s) and expense.

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Definitions:

Cognitive Dissonance

The psychological discomfort experienced when holding contradictory beliefs, values, or attitudes, often leading to an alteration in one of them to reduce the dissonance.

Induce

To bring about or give rise to something, often through a specific action or procedure.

Opposed

To be in disagreement or in conflict with something or someone.

Attitudes

An individual's learned predispositions to respond in a consistently favorable or unfavorable manner with respect to a given object.