Hinrich Company traded machinery with a book value of $120,000 and a fair value of $200,000. It received in exchange from Noach Company a machine with a fair value of $180,000 and cash of $20,000. Noach's machine has a book value of $190,000. The transaction lacks commercial substance. What amount of gain should Hinrich recognize on the exchange? O $-0- O $8.000 $20,000 O $80,000
Hinrich Company traded machinery with a book value of $120,000 and a fair value of $200,000. It received in exchange from Noach Company a machine with a fair value of $180,000 and cash of $20,000. Noach's machine has a book value of $190,000. The transaction lacks commercial substance. What amount of gain should Hinrich recognize on the exchange? O $-0- O $8.000 $20,000 O $80,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Hinrich Company traded machinery with a book value of $120,000 and a fair
value of $200,000. It received in exchange from Noach Company a machine
with a fair value of $180,000 and cash of $20,000. Noach's machine has a book
value of $190,000. The transaction lacks commercial substance. What amount
of gain should Hinrich recognize on the exchange?
O $-0-
O $8.000
$20,000
O $80,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5bd9fd3d-4f4d-4003-91c9-9c50e6822cb0%2Fe4bcf687-93f5-4eee-b8ba-69b76d2e867e%2Fe2tj0gq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Hinrich Company traded machinery with a book value of $120,000 and a fair
value of $200,000. It received in exchange from Noach Company a machine
with a fair value of $180,000 and cash of $20,000. Noach's machine has a book
value of $190,000. The transaction lacks commercial substance. What amount
of gain should Hinrich recognize on the exchange?
O $-0-
O $8.000
$20,000
O $80,000
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