EC exchanged an old widget-making machine (Model A) that originally cost $46,000 (accumulated amortization, $37,400) plus $10,000 cash for an improved widget-making machine (model B) owned by IC. IC originally acquired the Model B machine for $77,000 (accumulated amortization to date, $42,000). EC's machine has a current market value of $5,000 and IC's has a current market value of $20,000. These are similar assets. EC should record the cost of the Model B widget-making machine acquired at:

Question

Quizplus · Accepted Answer

The cost of the new machine (Model B) for EC is the fair market value of the old machine ($5,000) plus the cash paid ($10,000), totaling $15,000.

EC Exchanged an Old Widget-Making Machine (Model A) That Originally