Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows.Equipment given up:Clark Co. Keys Inc.Accumulated depreciationEquipment (original cost)$54,000 $63,00018,000 21,60032,400 43,200(10,800) 10,800Fair valueCash exchangedRequireda. 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.Exchange has Commercial SubstanceExchange Lacks Commercial Substancea. 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.a.Account NameDr.Cr.

Step 1: Determine the book value of the equipment for both companies:Clark Co.: Book value =…

Answered: Clark Co. and Keys Inc. exchange…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

Section: Chapter Questions

Problem 22E

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Qw.19a.

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