Use the Following Data for Questions 10 Through 17

question 23

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.
-Given the assumptions in 15 above except that the selling prices and fair market values of A and B are $756,000 and $675,000, respectively, at what amount will Brown record Machine A?

• A) $656,100.
• B) $607,500.
• C) $756,000.
• D) $675,000.
• For the following two questions, indicate the nature of the account or accounts to be debited when recording each transaction.

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Definitions:

Tolerances

The allowable limits of variation in a physical dimension or measurement within which a part or component can function correctly.

Enhancements and Migrations

The process of improving and moving data or applications from one operating environment to another, often involving upgrades to software or hardware.

New Product Development

A process that starts from idea generation to the commercialization of a new product, encompassing market research, design, testing, and launch.

Product-by-value Analysis

A method used in prioritizing products or projects based on their potential value or profitability to an organization.