EC Exchanged an Old Widget-Making Machine (Model A) That Originally

question 169

Multiple Choice

EC exchanged an old widget-making machine (Model A) that originally cost $46,000 (accumulated amortization, $37,400) plus $10,000 cash for an improved widget-making machine (model B) owned by IC. IC originally acquired the Model B machine for $77,000 (accumulated amortization to date, $42,000) . EC's machine has a current market value of $5,000 and IC's has a current market value of $20,000. These are similar assets. EC should record the cost of the Model B widget-making machine acquired at:

• A) $15,000.
• B) $17,600.
• C) $18,600.
• D) $20,000.

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Definitions:

Ego

In psychoanalytic theory, the part of the personality that mediates between the desires of the id and the constraints of the super-ego, operating on the reality principle.

Libido

A term used to describe sexual drive or desire, often discussed in the context of psychological and psychoanalytic theories.

Play Stage

The second stage in Mead’s theory of the development of self wherein children pretend to play the role of the particular or significant other.

Game Stage

The third stage in Mead’s theory of the development of self wherein children play organized games and take on the perspective of the generalized other.