Maxa Marina exchanged a boat with a cost of $80,000 (now 75% depreciated) and fair value of $25,000 for another boat with a current fair value of $27,000. No cash was paid or received. The new boat will perform the same function as the old boat, but cash flows are expected to last for 5 years longer with the new boat. At what value should Maxa record the new boat? $20,000 $27,000 $25,000 $2,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Maxa Marina exchanged a boat with a cost of $80,000 (now 75% depreciated) and fair value of $25,000 for another boat with a current fair value of $27,000. No cash was paid or received. The new boat will perform the same function as the old boat, but cash flows are expected to last for 5 years longer with the new boat. At what value should Maxa record the new boat?
$20,000
$27,000
$25,000
$2,000
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Step 1

Value to be recorded the new boat = Fair Value of asset given if available

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