Use the Following Information for Questions
Chung Inc If the Old Equipment Is Replaced Now, It Can Be

question 128

Multiple Choice

Use the following information for questions
Chung Inc. is considering the replacement of a piece of equipment with a newer model. The following data has been collected: $\begin{array}{lrr}&\text { Old Equipment}&\text { New Equipment }\\\text { Purchase price } & \$ 225,000 & \$ 375,000 \\\text { Accumulated depreciation } & 90,000 & -0- \\\text { Annual operating costs } & 300,000 & 240,000\end{array}$ If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years.
-The net advantage (disadvantage) of replacing the old equipment with the new equipment is

• A) $60,000
• B) $(15,000)
• C) $(75,000)
• D) $90,000

Comprehend the concept of inventoriable costs and period costs and their treatment in financial statements.

Calculate the cost of goods manufactured.

Grasp the matching principle in accounting and how it applies to product costs.

Understand the basic concept and calculation of Gross Domestic Product (GDP) and Real GDP.

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