Question

On August 1, Harvey Company offered to pay $13,000 for equipment that was advertised as being sold for $19,000 by Carrone Company. The equipment had a retail value of $23,000 on that day. On August 10, Carrone Company offered to sell the equipment for $14,700, and Harvey Company agreed to buy at that price. At what value will Harvey Company record the equipment on the books?

Answer 1

$14,700

Step-by-step explanation:

In the given question, the equipment has offered for $13,000 and sold at $19,000, and its retail value is $23,000 on August 1.

On August 10, the equipment was sold for $14,700 and the Harvey company agreed to buy at this price.

So, the recording of the equipment should be done based on when the seller and buyer agreed.

The recording of the transaction should be done when both parties are mutually agreed with the price.

Hence, the $14,700 amount should be recorded in the books and other amounts are ignored.