A Company Bought New Heating System for $42,000 and Was

question 68

Multiple Choice

A company bought new heating system for $42,000 and was given a trade-in of $2,000 on an old heating system,so the company paid $40,000 cash with the trade-in.The old system had an original cost of $37,000 and accumulated depreciation of $34,000.If the transaction has commercial substance,the company should record the new heating system at:

• A)$2,000.
• B)$3,000.
• C)$40,000.
• D)$42,000.
• E)$43,000.

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Definitions:

Job Specifications

A detailed description of the qualifications, skills, experience, and attributes required for a job position.

Knowledge

Information, understanding, or skill that one gets from experience or education.

Skills

Specific abilities or competencies that individuals possess or acquire, which enable them to perform tasks effectively.

Firm-Specific Human Capital

The unique knowledge, skills, and abilities employees develop that are valuable to a particular organization but not necessarily transferable.