Information Processing, Inc. (IPI) exchanges its used machine for a new machine with Jerrod Business Solutions Inc. The exchange has commercial substance. IPI’s used machine has a book value of $8,000 (original cost $12,000 less $4,000 accumulated depreciation) and a fair value of $6,000. The new machine has a fair value of $16,000. IPI also pays Jerrod Business Solutions $7,000 cash in the transaction. Accounting Issue(s): What is the correct amount that IPI should record for the machine it acquired in the exchange with Jerrod Business Solutions? Question 1: What is the correct amount that IPI should record for the machine it acquired in the exchange with Jerrod Business Solutions? $6,000 $7,000 $8,000 $13,000 $15,000 $16,000
Information Processing, Inc. (IPI) exchanges its used machine for a new machine with Jerrod Business Solutions Inc. The exchange has commercial substance. IPI’s used machine has a book value of $8,000 (original cost $12,000 less $4,000 accumulated
Accounting Issue(s): What is the correct amount that IPI should record for the machine it acquired in the exchange with Jerrod Business Solutions?
Question 1: What is the correct amount that IPI should record for the machine it acquired in the exchange with Jerrod Business Solutions?
- $6,000
- $7,000
- $8,000
- $13,000
- $15,000
- $16,000
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