An Entity Acquired an Item of Plant in Exchange for an Item

question 24

Multiple Choice

An entity acquired an item of plant in exchange for an item of equipment. The equipment has a carrying value of $5000 and a fair value of $6000. The journal entry to record the acquisition of the plant will show:

• A) a loss on acquisition of $1000.
• B) proceeds on sale of equipment of $1000.
• C) a gain on sale of $1000.
• D) proceeds on sale of plant of $1000.

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Definitions:

Chase Strategy

A demand-driven production strategy where production rates are adjusted to match demand to minimize inventory costs.

Flexibility Strategy

An approach to operations and decision-making that emphasizes the ability to adapt to changes, respond to unpredicted demands, or capitalize on new opportunities.

Level Strategy

A business approach that maintains a steady production rate and workforce level, even during fluctuating demand periods.

Aggregate Planning

A methodology in operations management aimed at determining optimal production, workforce levels, and inventory levels, to meet forecasting demand over a medium-range period.