Brown Company contracts with Sebastian Company to exchange refrigerated trucks. Brown Company will trade three SMC trucks for four DROF trucks owned by Sebastian Company. The trucks are approximately the same age and have the same remaining useful lives. The fair value of the SMC trucks is $51,000 with a book value of $38,000 (cost $65,000 less $27,000 accumulated depreciation). The DROF trucks have a fair value of $66,000 and Brown Company gives $15,000 in cash (paid) in addition to the SMC trucks. Assuming the exchange lacks commercial substance, what would be the value of the new DROF trucks? O $13,000 O $53,000 O $81,000 O $66,000

Brown Company contracts with Sebastian Company to exchange refrigerated trucks. Brown Company will trade three SMC trucks for four DROF trucks owned by Sebastian Company. The trucks are approximately the same age and have the same remaining useful lives. The fair value of the SMC trucks is $51,000 with a book value of $38,000 (cost $65,000 less $27,000 accumulated depreciation). The DROF trucks have a fair value of $66,000 and Brown Company gives $15,000 in cash (paid) in addition to the SMC trucks. Assuming the exchange lacks commercial substance, what would be the value of the new DROF trucks? O $13,000 O $53,000 O $81,000 O $66,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 44P

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