China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave equipment. The fair value and book value of the equipment were $17,000 and $10,000 (original cost of $35,000 less accumulated depreciation of $25,000), respectively. To equalize market values of the exchanged assets, China Inn paid $8,000 in cash to Midwest Chicken.
1.At what amount did China Inn record the delivery truck?
2.How much gain or loss did China Inn recognize on the exchange?
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 $25,000 and $28,000 (original cost of $33,000 less accumulated depreciation of $5,000), respectively. To equalize market values of the exchanged assets, Midwest Chicken received $8,000 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?
This question was asked on Jan 20, 2013.
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