A company pays 40.000,00€ to replace an important component of a factory machine. The replaced defective part is sold for 2.000€. The book value of the factory machine just before this replacement was 450.000€, of which 10.000€ refers to the defective part that is replaced. It is requested to calculate the book value of the factory machine after the replacement of the defective component as well as the result from the disposal of the defective component.

A company pays 40.000,00€ to replace an important component of a factory machine. The replaced defective part is sold for 2.000€. The book value of the factory machine just before this replacement was 450.000€, of which 10.000€ refers to the defective part that is replaced. It is requested to calculate the book value of the factory machine after the replacement of the defective component as well as the result from the disposal of the defective component.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.2.2P: Differential analysis report for machine replacement proposal Catalina Tooling Company is...

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