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1. Rene exchanged similar assets with Simone Company in a transaction with commercial substance. Rene gave up equipment that had a net book value of $47,000 (fair value $49,000) and Simone exchanged equipment with a net book value of $36,000 (fair value $35,000). What is the correct value at which Simone should record the new equipment? a. 35,000 2. Moore Company carries Product A in inventory on December 31, 2013 at its cost of $7.50. Because of a sharp decline in demand for the product, the selling price was reduced to $8 per unit. Moore's normal profit margin on Product A is $1.60, disposal costs are $1 per unit, and the replacement cost is $5.30. The per unit cost of ending inventory at December 31, 2013 should be $7.00 3. The following information is available for Silver Company for the quarter ended March 31, 2013 Merchandise inventory, January 1, 2013 $900,000 Purchases 3,400,000 Freight-in 200,000 Sales 4,800,000 If the gross margin recorded was 25% of sales, what should be the merchandise Inventory at March 31, 2013? $900,000 4. Hickory Company made a lump-sum purchase of 3 pieces of machinery for $115,000 from an unaffiliated company. At the time of acquisition, Hickory paid $5,000 to determine the appraised value of the machinery. The appraisal disclosed the following values: Machine A $70,000 Machine B $42,000 Machine C $28,000 What cost should be assigned to Machines A, B, and C? $60,000 $36,000 $24,000 5. Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of $5,000 at the end of each of the next 5 years. The company normally pays 15% interest. How much should Electro record as the cost of the machine? $16,750 6. Ashton Company exchanged a nonmonetary asset with a cost of $30,000 and an accumulated depreciation of $16,000 for another nonmonetary asset worth $12,000. Ashton also received $1,400 cash. In the entry to record this exchange, Ashton should record a: $600 loss