A company exchanges its old office equipment and $80000 for new office equipment. The old office equipment has a book value of $56000 and a fair value of $40000 on the date of the exchange. The cost of the new office equipment would be recorded at

Question

Quizplus · Accepted Answer

The cost of the new office equipment would be recorded at the fair value of the old office equipment plus any additional cash paid. The fair value of the old office equipment is $40000, and the additional cash paid is $80000, so the total cost of the new office equipment is $120000. Therefore, the correct answer is B.

A Company Exchanges Its Old Office Equipment and $80000 for New