Answer the following statements true (T) or false (F)
1. An exchange of plant assets has commercial substance if the future cash flows change as a result of the transaction.
2. Exchanges of plant assets that have commercial substance require any gain or loss on the transaction to be recognized
3. For exchanges of plant assets with commercial substance, the new asset received will be recorded at its market value.
4. Brooklyn Market recently traded in store fixtures. The exchange had commercial substance. The old fixtures had a cost of $71,000 and accumulated depreciation of $58,000. Brooklyn paid $95,000 for the new store fixtures. These new fixtures had a market value of $127,000. There is a loss of $19,000 on this exchange.
1. TRUE
2. TRUE
3. TRUE
4. FALSE
Explanation: Market value of assets received: $127,000
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Indicate whether the statement is true or false
The costs of doing business through the sale of goods and services are called
a. Net income b. Expenses c. Revenues d. Dividends
The process by which prospective buyers "internalize" or consider the information presented by the salesperson is referred to as a black box because:
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Ambrosia Foods produces a gourmet condiment that sells for $24 per unit. Variable cost is $6 per unit, and fixed costs are $8000 per month. If Ambrosia expects to sell 1500 units, compute the margin of safety in units. (Round any intermediate calculations and your final answer to the nearest whole unit.)
A) 444 units B) 1056 units C) 1500 units D) 19 units