Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Question
Chapter 10, Problem 23E
1.
To determine
Ascertain the book value of the old tractor at the time of exchange.
2.
To determine
Ascertain the amount of loss incurred during the asset exchange.
3.
To determine
State the amount that should be recorded in the asset account for the new tractor.
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Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $20,000 (original cost of $65,000 less accumulated depreciation of $45,000) and $17,000, respectively. Assume Calaveras paid $8,000 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks? (2) How much gain or loss will the company recognize on the exchange?
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Chapter 10 Solutions
Principles of Financial Accounting.
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