QUESTION 2

1. Durham Company manufactures baseballs. On September 1, 2020, it replaced one of its stitching machines with one that could produce more baseballs per hour. On September 1, 2020, here is the information related to the replacement:

   Purchase price of the new machine - $195,000

   Original cost of the old machine - 140,000

   Accumulated depreciation - old machine 125,000

   Special platform for new machine 12,000

   Durham sold the old machine for $6,000. What amount should Durham capitalize as the cost of the new stitching machine?

   	a.	$201,000
   	b.	$210,000
   	c.	$207,000
   	d.	$195,000