Question

On January 3, Carothers Corporation acquired $200,000 in new equipment in exchange for cash of $170,000 cash and a trade-in of old equipment. That old equipment originally cost $180,000 and had accumulated depreciation of $160,000; it had a book value of $20,000 at the time of exchange.

Answer 1

Carothers Corporation acquires new equipment for $200,000, which includes a cash payment of $170,000 and a trade-in of old equipment with a book value of $20,000.

Step-by-step explanation:

The main answer to the provided question lies within business accounting and more specifically, the transactions related to the acquisition of assets and determination of their book value. In the scenario described, Carothers Corporation is acquiring new equipment. The calculation of the cost of new equipment involves cash payment and trade-in of older assets. The old equipment, originally costing $180,000 with an accumulated depreciation of $160,000, has a book value of $20,000. When trading in the old equipment and paying additional cash, the total cost of the new equipment amounts to $200,000 ($170,000 in cash plus the $30,000 trade-in value of old equipment).

Answer 2

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Step-by-step explanation:

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.