A Machine That Was Purchased for $100,000 Has an Accumulated

question 48

Multiple Choice

A machine that was purchased for $100,000 has an accumulated depreciation of $70,000 as of the current date. The company exchanges the machine for a new machine. The new machine has a market value of $120,000 and company pays cash of $100,000. Assume the exchange has commercial substance. What is the result of this exchange?

• A)gain of $10,000
• B)gain of $5,000
• C)loss of $10,000
• D)loss of $30,000

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Definitions:

Organism

An organism is any living entity, ranging from a single-celled life form to more complex multicellular beings, such as humans.

Gestalt Psychology

A theory in psychology that proposes the human mind considers objects in their entirety before, or in parallel with, the perception of their individual parts.

Psychological Phenomena

Events, behaviors, or processes that relate to the mind and are exhibited through actions, thoughts, or emotions.

Entirety

The whole of something; the total or complete sum or amount of a particular thing or entity.