Keach Company traded machinery with a book value of $285,000 and a fair value of $270,000. It received in exchange from Marlin Company a machine with a fair value of $300,000. Keach also paid cash of $30,000 in the exchange. Marlin's machine has a book value of $285,000. The transaction lacks commercial substance. What amount of gain or loss should Keach recognize on the exchange? O $30,000 gain $-0- $1.500 loss $15,000 loss
Keach Company traded machinery with a book value of $285,000 and a fair value of $270,000. It received in exchange from Marlin Company a machine with a fair value of $300,000. Keach also paid cash of $30,000 in the exchange. Marlin's machine has a book value of $285,000. The transaction lacks commercial substance. What amount of gain or loss should Keach recognize on the exchange? O $30,000 gain $-0- $1.500 loss $15,000 loss
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Keach Company traded machinery with a book value of $285,000 and a fair
value of $270,000. It received in exchange from Marlin Company a machine
with a fair value of $300,000. Keach also paid cash of $30,000 in the exchange.
Marlin's machine has a book value of $285,000. The transaction lacks
commercial substance. What amount of gain or loss should Keach recognize on
the exchange?
O $30,000 gain
$-0-
$1.500 loss
$15,000 loss](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5bd9fd3d-4f4d-4003-91c9-9c50e6822cb0%2F09679fec-9f6c-4398-a18c-c1aa7afae9df%2F21r0y9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Keach Company traded machinery with a book value of $285,000 and a fair
value of $270,000. It received in exchange from Marlin Company a machine
with a fair value of $300,000. Keach also paid cash of $30,000 in the exchange.
Marlin's machine has a book value of $285,000. The transaction lacks
commercial substance. What amount of gain or loss should Keach recognize on
the exchange?
O $30,000 gain
$-0-
$1.500 loss
$15,000 loss
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