U1 CMA Intermediate

U1 CMA Intermediate - Heather Bolduc Questions Unit 1...

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Unit 1 Chapter 10 CMA Questions 2. Questions 2 and 3 are based on the following information. Harper is contemplating exchanging a machine used in its operations for a similar machine on May 31. Harper will exchange machines with either Austin Corporation or Lubin Company. The data relating to the machines are presented below. Assume that the exchanges would have commerc ial substanc e. Harper Austin Lubin Original cost of the machine $162,50 0 $180,00 0 $150,00 0 Accumul ated depreciat ion thru May 31 68,500 70,000 65,000 Fair value at May 31 80,000 95,000 60,000 2. If Harper exchanges its used machine and $15,000 cash for Austin's used machine, the gain that Harper should recogniz e from this transacti on for financial reporting purposes would be a. $0 b. $2,526 c. $15,000 d. $16,000 3. If Harper exchanges its used machine for Lubin's used machine and also receiveds $20,000 cash, the gain that Harper should recogniz e from this transacti on for financial reporting purposes would be a. $0 b. $4,000
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U1 CMA Intermediate - Heather Bolduc Questions Unit 1...

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