Amanda Company Is Considering the Replacement of a Machine That

question 40

Multiple Choice

Amanda Company is considering the replacement of a machine that is presently used in production.The following data are available:
$\begin{array}{lll}&\text { Old Machine }&\text { NEW Machine }\\\text { Original cost } & \$ 200,000 & \$ 160,000 \\\text { Useful life in years } & 10 & 5 \\\text { Current age in years } & 5 & 0 \\\text { Book value } & \$ 100,000 & -\\\text { Disposal value now } & \$ 32,000 & - \\\text { Disposal value in } 5 \text { years } & 0 & 0 \\\text { Annual cash operating costs } & \$ 20,000 & \$ 14,000\end{array}$
Adding all five years together,the total relevant costs to consider if the new machine is purchased is ________.

• A) $70,000
• B) $100,000
• C) $198,000
• D) $230,000

Grasp the concept, accounting treatment, and consequences of dishonored notes receivable.

Know how to record transactions involving notes receivable, including the exchange of notes for accounts receivable.

Understand the calculation and significance of interest on notes receivable.

Distinguish between different types of receivables and their classification on financial statements.

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Definitions:

Quarterly Earnings

A financial report indicating a company's revenue, expenses, and net income over a three-month period.

Due Diligence

The investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or transaction with another party.

Short-termism

A tendency to prioritize immediate gains over long-term objectives and benefits.

Sustainable Activities

Actions and practices that do not deplete resources or harm natural cycles, ensuring long-term environmental balance.