General Accounting Cutshall Industries Inc. exchanged old equipment and $22,500 cashfor similar equipment. The book value and the fair value of the oldequipment were $95,600 and $110,200, respectively.Assuming that the exchange has commercial substance, what is thegain or loss to be recorded by Cutshall Industries Inc.?

Step 1: Define Gain or Loss on Exchange of AssetsWhen a company exchanges an old asset for a new one…

Answered: Cutshall Industries Inc. exchanged old…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter9: Long-term Assets: Fixed And Intangible

Section: Chapter Questions

Problem 24E

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Foxtrot Co. exchanged equipment and $17,100 cash for similar equipment. The book value and the fair value of the old equipment were $81,000 and $91,700, respectively. Assuming that the exchange lacks commercial substance, Foxtrot would record a gain/(loss) on exchange of assets in the amount of: Multiple Choice $(10,700). $0. $10,700. $27,800.
Keach Company traded machinery with a book value of $285,000 and a fair value of $270,000. It received in exchange from Marlin Company a machine with a fair value of $300,000. Keach also paid cash of $30,000 in the exchange. Marlin's machine has a book value of $285,000. The transaction lacks commercial substance. What amount of gain or loss should Keach recognize on the exchange? O $30,000 gain $-0- $1.500 loss $15,000 loss
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Subject :- Accounting
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