27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Asset traded for similar asset

A printing press priced at a fair market value of $275,000 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press.

  1. a. Assuming that the trade-in allowance is $90,000, what is the amount of cash given?
  2. b. Assuming that the book value of the press traded in is $68,000, what is the gain or loss on the exchange?


To determine

Exchange of fixed assets: It refers to the purchase of new fixed assets in exchange of old fixed assets. Fixed Assets refer to the long-term assets having a useful life of more than a year which is, acquired by a company to be used in its business activities, for generating revenue. Examples of fixed assets are Plant, Property, Equipment, Land, and Buildings.

To determine: the amount of cash given.


Determine the amount of cash given.

Determine the amount of cash given
Particulars Amount ($)


To determine
the gain or (loss) on the exchange of equipment.

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