Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Clark Keys Co. 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.

Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Clark Keys Co. 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.

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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