What amount should Gunther Co. record for the asset received?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Gunther Co. and Central Perk Coffee House, Inc. have an exchange that lacks commercial substance. The following information is noted regarding the assets involved in the transaction: Gunther Co. Central Perk Coffee House, Inc. Book Value $720,000 $1,140,000 Fair Value 1,200,000 1,080,000 Cash Paid - 120,000 Cash Received 120,000 - What amount should Gunther Co. record for the asset received?
a. $600,000
b. $648,000
c. $1,200,000
d. $1,080,000
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