smith and sons company is considering a new drilling machine for its production plant to replace an old drilling machine that originally cost $10,000 and has $7,000 of accumulated depreciation. the new machine can be purchased at a cash cost of $16,000, but the distributor of the new drilling machine has offered to take the old machine in as a trade-in, thereby reducing the cost of the new machine to $14,000. based only on this information, calculate the total relevant cost of acquiring the new machine.

Question

spiderpig6881 spiderpig6881

14-12-2022
Business

contestada

smith and sons company is considering a new drilling machine for its production plant to replace an old drilling machine that originally cost $10,000 and has $7,000 of accumulated depreciation. the new machine can be purchased at a cash cost of $16,000, but the distributor of the new drilling machine has offered to take the old machine in as a trade-in, thereby reducing the cost of the new machine to $14,000. based only on this information, calculate the total relevant cost of acquiring the new machine.

Respuesta :

Otras preguntas

what is the answer to 10 over three divided by 2 over three

if it rained on 3 days out of 20 days, on what percent of the days did it rain

o bill customers for water usage, one city converts the number of gallons used into units. This relationship is represented by the equation g = 748u, where g is

When two monosaccharides undergo a dehydration synthesis reaction in which type of molecule is formed?

Which section north or south had the larger population why?

A group of atoms held together by covalent bonds is called

The value of a scientific variable _____. A. can change B. cannot be measured C. always remains the same D. only can be found using math

Who was tarik ibn zizad? the leader of north african mercenaries that invaded spain in ad 711. the prophet that began to receive the word of allah during the

Please help me with my homework

Which is the best question to ask while reading the fisherman’s wife? A. What is the fishermen’s wife’s name. B. Will the fishermen’s wife Alice suffer the cons

amardeepvt7 amardeepvt7 · Answer 1 · 2022-12-21T10:56:44+01:00

The distributor has offered to take the old machine in as a trade-in, thereby reducing the cost of the new machine to $14,000; on the basis given information, the total relevant cost of acquisition of the new machine is $14000.

What is Cost of Acquisition?

The overall amount a company incurs to bring on a new customer or buy an asset is known as the cost of acquisition. The sum after any discounts are added and any closing or transaction expenses are subtracted is referred to as a company's cost of acquisition by an accountant.

Further as per the International Financial Reporting Standard on Property, Plant & Equipment which says that when a business entity acquires an asset with exchange of old asset the cost of acquisition of new asset will fair market value of asset acquired after all adjustments or written down value of asset given up which ever is higher.

Therefore the written down value of old asset is $3000 ($10000-$7000) after removing the effect of accumulated depreciation, and the fair market value after adjusting the value of old asset by seller is $14000.

Thus the relevant cost of acquisition will be $14000.

Learn more about Cost of Acquisition refer:

https://brainly.com/question/28583490

#SPJ1