On january 2, novation corp. replaced its boiler with a more efficient one. the following information was available on that date: purchase price of new boiler $120,000 carrying amount of old boiler 10,000 fair value of old boiler 4,000 installation cost of new boiler 16,000 the old boiler was sold for $4,000. what amount should novation capitalize as the cost of the new boiler?

On january 2, well co. purchased 10% of rea, inc.’s outstanding common shares for $400,000, which equaled the carrying amount and the fair value of the interest purchased in rea’s net assets. well did not elect the fair value option. because well is the largest single shareholder in rea, and well’s officers are a majority on rea’s board of directors, well exercises significant influence over rea. rea reported net income of $500,000 for the year and paid dividends of $150,000. in its december 31 balance sheet, what amount should well report as investment in rea?