Empire, Inc., replaced its truck-and-dolley system of moving inventory around its plant with a computer-controlled conveyor system.
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Question:
Empire, Inc., replaced its truck-and-dolley system of moving inventory around its plant with a computer-controlled conveyor system. The costs associated with this equipment replacement were as follows:
Purchase price of conveyor system | $2,300,000 |
Book value of truck-and-dolley system | 40,000 |
Installation cost of new conveyor system | 225,000 |
The truck-and-dolley system was sold for scrap for $60,000. What value should be capitalized to the balance sheet of Empire, Inc., as the cost basis of the new conveyor system?
Related Book For
Vector Mechanics for Engineers Statics and Dynamics
ISBN: 978-0073212227
8th Edition
Authors: Ferdinand Beer, E. Russell Johnston, Jr., Elliot Eisenberg, William Clausen, David Mazurek, Phillip Cornwell
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