11-21 Disposal of assets. a) A company has an inventory of 1,100 assorted parts for...
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11-21 Disposal of assets. a) A company has an inventory of 1,100 assorted parts for a line of missiles that has been discontinued. The inventory cost is $78,000. The parts can be either (a) remachined at total additional costs of $24,500 and then sold for $33,000 or (b) sold as scrap for $6,500. Which action is more profitable? Explain your answer. Show all computations. b) A truck, costing $101,000 and uninsured, is wrecked its first day in use. It can be either (a) disposed of tor $17,500 cash and replaced with a similar truck costing $103,500 or (b) rebuilt for $89,500 and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Explain your answer. Show all computations
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