Electrical Engineering Equipment Ltd. purchased a machine for $100,000; current accumulated amortization totals

$40,000. Management is contemplating the purchase of a new machine for $120,000. Current disposal of the old machine

would cost $65,000.

What is the correct category for each item?

10)

______

A) Irrelevant: $100,000 cost of old machine, $40,000 accumulated amortization, $5,000 gain on sale; Relevant: $120,000 cost

of new machine, $65,000 disposal of old machine

B) Irrelevant: $120,000 of new machine, $40,000 accumulated amortization;

Relevant: $100,000 cost of old machine, $65,000 of disposal of old machine, $5,000 gain on sale

C) Irrelevant: $100,000 cost of old machine, $40,000 accumulated amortization;

Relevant: $120,000 cost of new machine, $5,000 gain on sale, $65,000 disposal of old machine

D) Irrelevant: $100,000 cost of old machine, $60,000 book value of old machine;

Relevant: $120,000 cost of new machine, $65,000 disposal of old machine, $5,000 gain on sale

E) Irrelevant: $120,000 cost of new machine, $65,000 disposal of old machine.

Relevant: $100,000 cost of old machine, $60,000 book value of old machine, $5,000 gain on sale