Chapter 8, Problem 18P

what was the cost of goods sold for the year?

On March 5, 2010, Yamada Dairy Co. decided to replace its outdated pasteurization system with a more efficient one. The old system had a book value of $10,500 and a fair value of $1,500. Yamada's new pasteurization system has a fair value of $210,000, for which Yamada paid $208,500 after allowing the contractor to keep the old equipment. How much should Yamada capitalize on the cost of the new pasteurization system?

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