A Fixed Asset with a Cost of $52,000 and Accumulated

question 32

Multiple Choice

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, at what cost will the new equipment be recorded in the books?

• A) $54,000
• B) $59,500
• C) $60,000
• D) $60,500

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Definitions:

Principal

The original sum of money borrowed in a loan, or the amount of the investment.

Negotiated

The process of discussing to reach an agreement in business, employment conditions, or contracts.

Export Controls List

A regulatory list that identifies items subject to export restrictions or licenses, often for reasons of national security, foreign policy, or trade objectives.

Export Broker

A person or company that acts as an intermediary, arranging for goods to be sold and shipped to overseas buyers.