Ivory Has a Model B Widget-Making Machine That Originally Cost

question 56

Multiple Choice

Ivory has a Model B widget-making machine that originally cost $77,000 (accumulated amortization, $44,000) . It has a current market value of $20,000. Ivory exchanged this machine for a similar widget-making machine (a smaller one, Model A) owned by EC. The Model A originally cost $46,000 (accumulated amortization to date, $37,400) . It has a current market value of $18,000. Ivory received $10,000 cash on the exchange. Ivory should record the cost of the Model A widget-making machine acquired at:

• A) $10,000.
• B) $18,000.
• C) $20,000.
• D) $25,000.

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Definitions:

Third-Party Payments

Payments made by someone other than the consumer or provider of a good or service, often by insurance companies or government agencies.

Healthcare Expenditures

The total amount of spending on health services and products in a specific period, including public and private spending.

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A system or group of people governing an organized community, often a state.

Federal Tax Legislation

Laws enacted by the federal government to impose taxes on individuals and businesses to finance government activities.