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Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Clark Co. Keys Inc. Equipment given up: Equipment (original cost) $60,000 $70,000 Accumulated depreciation 20,000 24,000 Fair value 36,000 48,000 Cash exchanged (12,000) 12,000 Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance. a. Exchange has Commercial Substance a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. b. Account Name To record acquisition of equipment. Exchange Lacks Commercial Substance To record acquisition of equipment. Dr. Cr.

Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Clark Co. Keys Inc. Equipment given up: Equipment (original cost) $60,000 $70,000 Accumulated depreciation 20,000 24,000 Fair value 36,000 48,000 Cash exchanged (12,000) 12,000 Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance. a. Exchange has Commercial Substance a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. b. Account Name To record acquisition of equipment. Exchange Lacks Commercial Substance To record acquisition of equipment. Dr. Cr.

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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Ee 58.

Reporting an Asset Exchange Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Clark Co. Keys Inc. Equipment given up: Equipment (original cost) Accumulated depreciation Fair value Cash exchanged Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance. $60,000 $70,000 20,000 24,000 36,000 48,000 (12,000) 12,000 a. b. Exchange has Commercial Substance a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. Account Name To record acquisition of equipment. Exchange Lacks Commercial Substance To record acquisition of equipment. Dr. Cr.
Transcribed Image Text:Reporting an Asset Exchange Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Clark Co. Keys Inc. Equipment given up: Equipment (original cost) Accumulated depreciation Fair value Cash exchanged Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance. $60,000 $70,000 20,000 24,000 36,000 48,000 (12,000) 12,000 a. b. Exchange has Commercial Substance a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. Account Name To record acquisition of equipment. Exchange Lacks Commercial Substance To record acquisition of equipment. Dr. Cr.
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