SB traded in printing press A with a book value of $5,200 and a market value of $6,000 for printing press B that had a market value of $8,801. Press B was both larger and faster than the one exchanged and was quoted at $10,000. SB also paid $2,800 cash boot. What should SB record as the cost of press B?

Question

Quizplus · Accepted Answer

The cost of Press B can be determined by taking the market value of Press B and subtracting any boot paid.

Market value of Press B = $8,801 
Boot paid = $2,800

Cost of Press B = $8,801 - $2,800 = $6,001

Therefore, the cost of press B should be recorded as $8,800 (closest option).

SB Traded in Printing Press a with a Book Value