On december 1 wynne corporation exchanged 2000 shares

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12. On December 1, Wynne Corporation exchanged 2,000 shares of its $25 par value common stock held in treasury for a parcel of land to hold for a future plant site. The treasury shares were acquired by Wynne at a cost of $40 per share, and on the exchange date the common shares of Wynne had a fair value of $50 per share. Wynne received $6,000 for selling scrap when an existing building on the property was removed from the site. Based on these facts, the land should be capitalized at a. $74,000 b. $80,000
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c. $94,000 d. $100,000 13. On December 1, 2007, Fiene Company acquired a new delivery truck in exchange for an old delivery truck that it had acquired in 2004. The old truck was purchased for $35,000 and had a book value of $13,300. On the date of the exchange, the old truck had a market value of $14,000. In addition, Fiene paid $45,500 cash for the new truck, which had a list price of $63,000. The exchange lacked commercial substance. At what amount should Fiene record the new truck for financial accounting purposes? 14. Marlin Company traded machinery with a book value of $180,000 and a fair value of $300,000. It received in exchange from Keach Company a machine with a fair value of $270,000 and cash of $30,000. Keach’s machine has a book value of $285,000. What amount of gain should Marlin recognize on the exchange?
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  • Spring '10
  • Cavendar
  • Accounting, Depreciation, Generally Accepted Accounting Principles, Plant and Equipment, Holiday Hotel

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