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Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $33,000 (original cost of $84,500 less accumulated depreciation of $51,500) and $23,500, respectively. Assume Calaveras paid $9,500 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks? (2) How much gain or loss will the company recognize on the exchange? (1) (2) Answer is complete but not entirely correct. $ ✓$ Value of pickup trucks Loss on exchange 33,000✔ 10,500 X

Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $33,000 (original cost of $84,500 less accumulated depreciation of $51,500) and $23,500, respectively. Assume Calaveras paid $9,500 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks? (2) How much gain or loss will the company recognize on the exchange? (1) (2) Answer is complete but not entirely correct. $ ✓$ Value of pickup trucks Loss on exchange 33,000✔ 10,500 X

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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Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $33,000 (original cost of $84,500 less accumulated depreciation of $51,500) and $23,500, respectively. Assume Calaveras paid $9,500 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks? (2) How much gain or loss will the company recognize on the exchange? (1) (2) X Answer is complete but not entirely correct. Value of pickup trucks $ Loss on exchange $ 33,000 10,500 X
Transcribed Image Text:Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $33,000 (original cost of $84,500 less accumulated depreciation of $51,500) and $23,500, respectively. Assume Calaveras paid $9,500 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks? (2) How much gain or loss will the company recognize on the exchange? (1) (2) X Answer is complete but not entirely correct. Value of pickup trucks $ Loss on exchange $ 33,000 10,500 X
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