SB Traded in Printing Press a with a Book Value

question 88

Multiple Choice

SB traded in printing press A with a book value of $5,200 and a market value of $6,000 for printing press B that had a market value of $8,801. Press B was both larger and faster than the one exchanged and was quoted at $10,000. SB also paid $2,800 cash boot. What should SB record as the cost of press B?

• A) $6,000
• B) $8,000
• C) $8,800
• D) $10,000

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Definitions:

Contingencies

Potential liabilities or gains that may occur in the future, dependent on the outcome of a specific event.

Federal Income Tax

Federal Income Tax is the tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

FICA Tax

Federal Insurance Contributions Act tax, a mandatory payroll deduction in the United States funding Social Security and Medicare benefits.