China Inn and Midwest Chicken exchanged assets. Midwest Chicken received equipment and gave a delivery truck. The
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Question:
China Inn and Midwest Chicken exchanged assets. Midwest Chicken received equipment and gave a delivery truck. The fair value and book value of the delivery truck given were $24,000 and $27,000 (original cost of $32,000 less accumulated depreciation of $5,000), respectively. To equalize market values of the exchanged assets, Midwest Chicken received $7,500 in cash from China Inn.
1. At what amount did Midwest Chicken record the equipment?
2. How much gain or loss did Midwest Chicken recognize on the exchange?
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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