Exercise 10-16 Sweet Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $240,000 cash. The following information was gathered. Depreciation to Date on Seller's Books Book Value orn Seller's Books $120,000 120,000 Initial Cost o Appraised Value Description Machinery Equipment Seller's Books $240,000 144,000 $120,000 24,000 $216,000 72,000 Asset 3: This machine was acquired by making a $24,000 down payment and issuing a $72,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $36,000 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $86,160 Asset 4: This machinery was acquired by trading in used machinery. (The exchange lacks commercial substance.) Facts concerning the trade-in are as follows. Cost of machinery traded Accumulated depreciation to date of sale Fair value of machinery traded Cash received Fair value of machinery acquired $240,000 96,000 192,000 24,000 168,000 Asset 5: Equipment was acquired by issuing 100 shares of $19 par value common stock. The stock had a market price of $26 per share Construction of Building: A building was constructed on land purchased last year at a cost of $360,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date 2/1 $288,000 Payment