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:

Time Sampling Error

A statistical error that occurs when a sample is collected at a specific time that is not representative of the overall population or phenomenon.

Measurement Error Sources

Factors that contribute to the difference between the measured value and the true value of what is being measured.

Estimating Reliability

The process of calculating or predicting the consistency of a test's results through various statistical methods.

Correlation Relationships

The statistical measure that describes the extent to which two variables change together, indicating a potential relationship but not causation.