Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is

A) $30,000
B) $35,000
C) $15,000
D) $45,000

Question

Autumn Hamilton · Accepted Answer

Final Answer : B, Explanation :  The actual cost of the equipment is $35,000 ($15,000 + $20,000). Therefore, the amount used in the buyer's accounting records should be the actual cost of the equipment, which is $35,000. The market value and the offered price are not relevant in determining the accounting value of the equipment.

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is

A) $30,000
B) $35,000
C) $15,000
D) $45,000

Definitions

Learning Objectives

Learning Objectives

Related questions

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition isA) $30,000B) $35,000C) $15,000D) $45,000

Definitions

Learning Objectives

Learning Objectives

Related questions