Question: On July 1, Year 1, DDC Co. exchanged a used crane for a new crane with ZN Corp. The used crane had a book value

On July 1, Year 1, DDC Co. exchanged a used crane for a new crane with ZN Corp. The used crane had a book value of $120,000 ($225,000 cost minus $105,000 accumulated depreciation) and a fair value of $125,000. The fair value of the new crane is $110,000. In addition to the exchange of the used crane, ZN paid DDC $15,000. The exchange lacks commercial substance.

How much should DDC record as the cost of the new crane in Year 1?

How much should DDC record as a gain (loss), if any, in Year 1?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Early in the year, John Raymond founded Raymond Engineering Co. for the purpose of manufacturing a special flow control valve that he had designed. Shortly after year-end, the companys accountant was...

On December 31, Year 1, JM Co. exchanged a used machine for a new machine from DP Inc. The used machine had a book value of $100,000 ($120,000 cost minus $20,000 accumulated depreciation) and a fair...

For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and losses as negative values using a leading minus...

Scroll down to complete all parts of this task. For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and...

On December 31, Year 1, JM Co. exchanged a used machine for a new machine from DP, Inc. The used machine had a book value of $100,000 ($120,000 cost $20,000 accumulated depreciation) and a fair...

On December 31, Year 1, JM Co. exchanged a used machine for a new machine from DP, Inc. The used machine had a book value of $200,000 ($220,000 cost - $20,000 accumulated depreciation) and a fair...

For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and losses as negative values using a leading minus...

For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and losses as negative values using a leading minus ()...

The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of...

The tank is filled with water to a depth d. Determine the resultant force the water exerts on side A and side B of the tank. If oil instead of water is placed in the tank, to what depth d should it...

The extraction of zinc by carbothermic reduction of zinc oxide sinter at 1100C can be represented by the reaction Zno(s) + C(s) = Zn(g) + CO(g) Calculate the heat of this reaction at 1100C, given:...

For the system described in Problem P10.13, the goal is to achieve a phase margin of P.M. = 50 with the additional requirement that the time to settle (to within 2% of the final value) is Ts 4 s....

Occasionally, the A will decay by the following reaction; A0 p+ + e + ve. Which of the four forces in nature is responsible for this decay? How do you know?

What is the minimum energy that is required to break a nucleus of 12C (of mass 11.996 71 u) into three nuclei of 4He (of mass 4.001 51 u each)?

In mechanics, mass less strings are often assumed. Why is this not a good assumption when discussing waves on strings?

An electron is in the ground state in a two-dimensional, square, infinite potential well with edge lengths L. We will probe for it in a square of area 400 pm2 that is centered at x = L/8 and y = L/8....

Four identical point charges (q = +10.0 μC) are located on the corners of a rectangle as shown in Figure P23.57. The dimensions of the rectangle are L = 60.0 cm and W = 15.0 cm. Calculate the...

If we use the dynamic programming algorithm to solve a sequential - decision making problem, we need to define the cost ( or payoff ) of each stage to be independent of future decisions.

2. In this chapter, the reader should reflect on the following concepts: personal change competence, personal achievements, personal benchmarking, personal motivation strategy, personal mastery...

The tools are structured and for improving the individuals communication skills.

Always show respect for the other person or persons.