When plant assets are exchanged the cost of the new asset is the book value of the old asset plus any cash paid.

Name: When plant assets are exchanged the cost of the new asset is the book value of the old asset plus any cash paid.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The cost of the new asset is determined by the fair market value of the asset given up plus any cash paid. The book value of the old asset is not directly used to calculate the cost of the new asset.

When Plant Assets Are Exchanged the Cost of the New