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A company exchanged equipment from inventory for a car to be used as long-term asset. The following information relates to this exchange:                Carrying amount of the equipment                             600,000              List selling price of the equipment                              900,000              Fair value of the car                                                           860,000              Cash difference paid by A company                            100,000   What amount of gain should be recognized on the exchange? a. 0 b. 200,000 c. 260, 000 d. 160,000

A company exchanged equipment from inventory for a car to be used as long-term asset. The following information relates to this exchange:                Carrying amount of the equipment                             600,000              List selling price of the equipment                              900,000              Fair value of the car                                                           860,000              Cash difference paid by A company                            100,000   What amount of gain should be recognized on the exchange? a. 0 b. 200,000 c. 260, 000 d. 160,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company exchanged equipment from inventory for a car to be used as long-term asset. The following information relates to this exchange:

 

             Carrying amount of the equipment                             600,000

             List selling price of the equipment                              900,000

             Fair value of the car                                                           860,000

             Cash difference paid by A company                            100,000

 

What amount of gain should be recognized on the exchange?

a. 0

b. 200,000
c. 260, 000
d. 160,000
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