Problem 14-86 (b) (LO. 9) Griffin sold three items of business equipment for a total of $144,000. None of the equipment was appraised to determine its value. Griffin's cost and adjusted basis for the assets are shown below. Asset Cost Adjusted Basis Equipment1 $63,800 $40,000 Equipment 2 34,800 32,000 Equipment 3 46,400 22,000 Total $145,000 $94,000 Griffin has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $144,000 to the buyer in this arm's length transaction. How should Griffin allocate the sales price and figure the gain or loss on the sale of the three assets?
Problem 14-86 (b) (LO. 9) Griffin sold three items of business equipment for a total of $144,000. None of the equipment was appraised to determine its value. Griffin's cost and adjusted basis for the assets are shown below. Asset Cost Adjusted Basis Equipment1 $63,800 $40,000 Equipment 2 34,800 32,000 Equipment 3 46,400 22,000 Total $145,000 $94,000 Griffin has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $144,000 to the buyer in this arm's length transaction. How should Griffin allocate the sales price and figure the gain or loss on the sale of the three assets?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 90PSB
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Problem 14-86 (b) (LO. 9)
Griffin sold three items of business equipment for a total of $144,000. None of the equipment was appraised to determine its value. Griffin's cost and adjusted basis for the assets are shown below.
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Griffin has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $144,000 to the buyer in this arm's length transaction. How should Griffin allocate the sales price and figure the gain or loss on the sale of the three assets?
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