A company exchanges its old office equipment and $40,000 for new office equipment. The old office equipment has a book value of $28,000 and a fair market value of $20,000 on the date of the exchange. The cost of the new office equipment would be recorded at
A) $68,000.
B) $60,000.
C) $48,000.
D) cannot be determined.

Question

Quizplus · Accepted Answer

The cost of the new equipment would be the fair market value of the old equipment plus any additional cash paid, which is $20,000 + $40,000 = $60,000.

A Company Exchanges Its Old Office Equipment and $40,000 for New