19. A company exchanges its old office equipment and $40,000 for new office equipment. The old office equipment has a book value of $28,000 and a fair market value of $20,000 on the date of the exchange. The cost of the new office equipment would be recorded at A) $68,000. B) $60,000. C) $48,000. D) cannot be determined. Assume No comm Substance 20. Gains on an exchange of plant assets that has commercial substance are A) deducted from the cost of the new asset acquired. B) deferred. C) not possible. D) recognized immediately. 21. Losses on an exchange of plant assets that has commercial substance are A) not possible. B) deferred. C) recognized immediately. D) deducted from the cost of the new asset acquired. 22. In a perpetual inventory system, cost of goods sold is recorded A) on a daily basis. B) on a monthly basis. C) on an annual basis. D) with each sale 23. Under a perpetual inventory system, acquisition of merchandise for resale is debited to the A) Merchandise Inventory account. B) Purchases account. C) Supplies account. D) Cost of Goods Sold account. 24. A buyer would record a payment within the discount period under a perpetual inventory system by crediting A) Accounts Payable. B) Merchandise Inventory. C) Purchase Discounts. D) Sales Discounts Page 5