In January 2011, Butz Company Exchanged an Old Machine, with a Book

Multiple Choice

In January 2011, Butz Company exchanged an old machine, with a book value of $156,000 and a fair value of $140,000, and paid $40,000 cash for a similar used machine having a list price of $200,000. The exchange had commercial substance. At what amount should the machine acquired in the exchange be recorded on Butz's books?

A) $200,000
B) $196,000
C) $184,000
D) $180,000