Lew's Metals Has a Machine Sitting Idle in Its Warehouse

question 19

Multiple Choice

Lew's Metals has a machine sitting idle in its warehouse.The machine originally cost $213,000,has a current book value of $32,300,has a scrap metal value of $13,000,and a market value of $46,900.The machine is totally paid for.What value should be placed on this machine if it is used for a new project?

• A) $0
• B) $13,000
• C) $32,300
• D) $46,900

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Definitions:

Paid-In Capital

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares plus any amount paid in excess.

Par Value

A nominal value assigned to a share of stock in the corporation's charter, serving as the minimum price at which shares can be issued.

Common Stock

A type of equity security that represents ownership interest in a corporation, giving shareholders voting rights and a share in the company's profits via dividends.

Treasury Stock

Repurchased shares by a company, treasury stock is treated as an asset on the balance sheet and can affect the company's shareholders' equity and earnings per share.