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?
A)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
B)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
C)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
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: $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

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The Answer of 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?
A)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
B)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
C)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
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: $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