A Company Decides to Exchange Its Old Machine and $231,000

question 152

Multiple Choice

A company decides to exchange its old machine and $231,000 cash for a new machine. The old machine has a book value of $189,000 and a fair value of $210,000 on the date of the exchange.The cost of the new machine would be recorded at

• A)$420,000.
• B)$441,000.
• C)$399,000.
• D)cannot be determined.

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Definitions:

Wages

Monetary compensation paid by an employer to an employee in exchange for work performed, typically calculated on an hourly, daily, or weekly basis.

Bonuses

Additional compensation rewards given to employees as recognition for good work or achievements beyond their regular pay.

Job Evaluations

A systematic way of determining the value/worth of a job in relation to other jobs within an organization to establish a fair and equitable pay structure.

Existing Job

A current position within an organization that has already been established and filled by an employee.