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24 January, 08:42

A company's old machine, which cost $45,000 and had accumulated depreciation of $34,500, was traded in on a new machine of like purpose having an estimated 20-year life with an invoice price of $55,000. The company also paid $48,000 cash, along with its old machine to acquire the new machine. The value of new machine should be recorded at:

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  1. 24 January, 09:04
    0
    Total Value of New Machine = $58500

    Explanation:

    given data

    old machine cost = $45,000

    accumulated depreciation = $34,500

    invoice price = $55,000

    cash paid = $48,000

    to find out

    new machine should be recorded

    solution

    we get here first value of Old Machine after Depreciation is

    value of Old Machine after Depreciation = Old Machine Value-Depreciation ... 1

    put here value

    value of Old Machine after Depreciation = $45,000 - $34,500

    value of Old Machine after Depreciation = $10500

    and

    Total Value of New Machine = Cash Paid + Balance Value of Old Machine ... 2

    Total Value of New Machine = $48,000 + $10500

    Total Value of New Machine = $58500
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