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Leya [2.2K]
3 years ago
7

A company purchased equipment valued at $310,000. It traded in old equipment for a $121,000 trade-in allowance and the company p

aid $189,000 cash with the trade-in. The old equipment cost $300,000 and had accumulated depreciation of $180,000. This transaction has commercial substance. What is the recorded value of the new equipment?
a. $120,000.b. $121,000.c. $189,000.d. $309,000.e. $310,000.
Business
1 answer:
notka56 [123]3 years ago
5 0

Answer:

e. $310,000

Explanation:

If the exchange transaction has commercial substance the new equipment acquired is measured at the <u>fair value of the asset given up</u> plus  fair value of <u>any other assets transferred</u>.

Value of the new equipment = Trade in Allowance + Cash paid

                                                = $121,000 + $189,000

                                                =  $310,000

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Therefore firm A will need to invest in an expansion of its production capacity while firm B can keep operating without new investments.

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Answer:

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Explanation:

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Eg: Income, price of a consumer = Rs100, Rs10 respectively.

Real Income = Income/price = 100/10 = 10. Price fall to 8 increases purchasing power to 12.5 (100/8). Price rise to 12 decreases purchasing power to 8.3 (100/12).

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3 0
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3 years ago
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Answer:

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