A Company's Old Machine That Cost $40,000 and Had Accumulated

question 105

Multiple Choice

A company's old machine that cost $40,000 and had accumulated depreciation of $22,000 was traded in on a new machine having an estimated 20-year life with an invoice price of $45,000.The company also paid $33,000 cash,along with its old machine to acquire the new machine.If this transaction has commercial substance,the new machine should be recorded at:

• A)$40,000.
• B)$33,000.
• C)$45,000.
• D)$18,000.
• E)$51,000.

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Definitions:

Continuing Relationship

An ongoing interaction or connection between individuals or entities, typically characterized by mutual benefit or interest.

Resale

The act of selling an item or product that has been bought previously, often used in the context of business to describe secondary sales.

Beginning Paragraph

The introductory section of a piece of writing, designed to grab the reader's attention and outline the main topic or argument.

Evidence

Information or details that support a statement, theory, or finding, making it more credible or comprehensible.