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:

Question

Business

Timothy Morales

17 January, 12:37

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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Answers (1)

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Eve Duke · Answer 1

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