Question

The Tattle Teller has a printing press sitting idly in its back room. The press has no market value to another printer because the machine utilizes old technology. The firm could get $480 for the press as scrap metal. The press is six years old and originally cost $174,000. The current book value is $3,570. The president of the firm is considering a new project and feels he can use this press for that project. What value, if any, should be assigned to the press as an initial cost of the new project?

Answer 1

Answer: $480

Explanation:

Given that,

Scrap value of metal = $480

press is six years old, Original cost = $174,000

Current book value = $3,570

Since, we know that the realizable value of the printing press is only $ 480, so  tattle teller should assign the same as the initial cost of the new project.

Hence, $480 will be the initial cost of press for the new project.