Ace Electronics bought a new factory for $5,000,000.The factory was originally offered for sale for $5,200,000,but Ace successfully negotiated a lower price.Acme,Inc.was also trying to buy the factory and offered to pay $4,900,000.Ace should record the factory on its books at ________.
A)$5,200,000
B)$5,000,000
C)$4,500,000
D)$4,900,000

Question

Quizplus · Accepted Answer

Ace Electronics bought the factory for $5,000,000, which is the price they negotiated and paid. The original listing price and the offer made by Acme, Inc. are irrelevant to the cost that Ace paid for the factory, so options A, C, and D can be eliminated. Therefore, the best choice is B, which represents the actual amount Ace paid for the factory.

Ace Electronics Bought a New Factory for $5,000,000