1) A firm trades in an old machine with a carrying value of $20,000 for new machine that has a list price of $32,000 and a fair value of $33,000. The old machine was acquired 5 years ago at a cost of $40,000. At what value will the firm record the new machine?

$40,000

$32,000

$20,000

$33,000

2) Goodwill is recorded as an intangible asset when ____. a. the fair value of a company's assets exceed the carrying value of those assets b. the fair value of a company's assets are greater than the cost of acquiring that company c. a company's exceptional quality, reputation, or capability enables it to generate exceptional earnings d. one company acquires another company

3) Use of the double-declining balance method ____. a. ignores the scrap value of the asset for all purposes b. results in twice the depreciation expense that would be recognized by the straight-line method each period c. means that the amount of depreciation expense decreases year after year d. All of these are true