Assigning Value to Assets in Nonmonetary Exchange Lacking Commercial Substance Mariot trades in its old equipment (with the following carrying values) for new equipment. Mariot received $2,400 cash on the exchange. The fair value of the new equipment is $8,400. Original cost of old equipment $6,000 Accumulated depreciation on old equipment $3,600 If the transaction lacks commercial substance, what amount does Mariot assign to the new equipment? Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Amount assigned to new equipment s 4,800 x

Assigning Value to Assets in Nonmonetary Exchange Lacking Commercial Substance Mariot trades in its old equipment (with the following carrying values) for new equipment. Mariot received $2,400 cash on the exchange. The fair value of the new equipment is $8,400. Original cost of old equipment $6,000 Accumulated depreciation on old equipment $3,600 If the transaction lacks commercial substance, what amount does Mariot assign to the new equipment? Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Amount assigned to new equipment s 4,800 x

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Equipment given up: Clark Co. Keys Inc. Accumulated depreciation Equipment (original cost) $54,000 $63,000 18,000 21,600 32,400 43,200 (10,800) 10,800 Fair value Cash exchanged Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance. Exchange has Commercial Substance Exchange Lacks Commercial Substance a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. a. Account Name Dr. Cr.
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Q A company exchanged old equipment and $18,000 cash for similar equipment. The book value and the fair value of the old equipment were $82,000 and $90,000, respectively. Assuming that the exchange lacks commercial substance, the company would record a gain(loss) on exchange of assets in the amount of: Multiple Choice $8,000. ($8,000). $26,000. $0.
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