A company decides to exchange its old machine and $231000 cash for a new machine. The old machine has a book value of $189000 and a fair value of $210000 on the date of the exchange. The cost of the new machine would be recorded at
A) $420000.
B) $441000.
C) $399000.
D) cannot be determined.

Question

Quizplus · Accepted Answer

The cost of the new machine should be equal to the fair value of the old machine plus any cash paid or received. Therefore, the cost of the new machine would be $210,000 + $231,000 = $441,000.

A Company Decides to Exchange Its Old Machine and $231000