Asked by
23_ H_SHAILEY DRAVID
on Nov 14, 2024
Verified
A company exchanges its old office equipment and $80000 for new office equipment. The old office equipment has a book value of $56000 and a fair value of $40000 on the date of the exchange. The cost of the new office equipment would be recorded at
A) $136000.
B) $120000.
C) $96000.
D) cannot be determined.
Office Equipment
Long-term assets used in an office for the business operations, such as computers, desks, and chairs.
Book Value
Book value is the net value of a company's assets as recorded on its financial statements, minus any liabilities.
Fair Value
An estimated market value of an asset or liability, based on the current market price or valuations under similar circumstances.
- Acquire understanding of the methods involved in obtaining, valuing, and disposing of intangible assets and property, plant, and equipment (PP&E).
- Evaluate the consequences of adjustments in the estimated value of assets and asset swaps on accounting statements.
Verified Answer
GP
Learning Objectives
- Acquire understanding of the methods involved in obtaining, valuing, and disposing of intangible assets and property, plant, and equipment (PP&E).
- Evaluate the consequences of adjustments in the estimated value of assets and asset swaps on accounting statements.