Bronwyn's Computer Shop purchased some new equipment by trading in old equipment with a carrying amount of $10 000. Cash of $8 000 was paid to the supplier and a trade-in allowance of $7 000 was granted. The new equipment should be recorded at:

Question

Quizplus · Accepted Answer

The new equipment should be recorded at the total cost to the company, which includes the cash paid ($8,000) plus the carrying amount of the old equipment traded in ($10,000), minus the trade-in allowance ($7,000). This results in a total of $8,000 + $10,000 - $7,000 = $11,000. However, since none of the provided options match this calculation, and assuming a possible typo or misunderstanding in the question or answer options, the closest correct approach to record the new equipment's value involves adding the cash paid to the trade-in allowance, which equals $8,000 + $7,000 = $15,000, aligning with option D by default.

Bronwyn's Computer Shop Purchased Some New Equipment by Trading in Old