Sand Corp exchanged equip used in its operations and pay $2,000 cash to Dake Corp for similiar equip used and its operations. The following is true: FMV of equip given up by Sand Corp is $13,500 (for Dake its $15,500) Cost of equip given up for Sand corp and Dake is $28,000; Accumulated Depr for Sand Corp is $19,000 (for Dake is $10,000) If there is no commercial substance, is the basis for the new asset received by Dake higher, lower or the same as compared to when there was commercial substance?
Sand Corp exchanged equip used in its operations and pay $2,000 cash to Dake Corp for similiar equip used and its operations. The following is true: FMV of equip given up by Sand Corp is $13,500 (for Dake its $15,500) Cost of equip given up for Sand corp and Dake is $28,000; Accumulated Depr for Sand Corp is $19,000 (for Dake is $10,000) If there is no commercial substance, is the basis for the new asset received by Dake higher, lower or the same as compared to when there was commercial substance?
Chapter1: Financial Statements And Business Decisions
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14. Sand Corp exchanged equip used in its operations and pay $2,000 cash to Dake Corp for similiar equip used and its operations. The following is true: FMV of equip given up by Sand Corp is $13,500 (for Dake its $15,500) Cost of equip given up for Sand corp and Dake is $28,000; Accumulated Depr for Sand Corp is $19,000 (for Dake is $10,000)
If there is no commercial substance, is the basis for the new asset received by Dake higher, lower or the same as compared to when there was commercial substance?
the same?
higher?
lower?
Thank you
brenda
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