Kim Company exchanges assets with Chero Company. Kim Company exchanges equipment with a book value of $25,000 and fair market value of $40,000 for Chero Company’s land with a cost of $7,500 and fair market value of $38,000. Chero Company also paid Kim Company $2,000 in cash. Compute Kim Company’s cost of the land acquired and any gain or loss on the exchange.
Kim Company exchanges assets with Chero Company. Kim Company exchanges equipment with a book value of $25,000 and fair market value of $40,000 for Chero Company’s land with a cost of $7,500 and fair market value of $38,000. Chero Company also paid Kim Company $2,000 in cash. Compute Kim Company’s cost of the land acquired and any gain or loss on the exchange.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kim Company exchanges assets with Chero Company. Kim Company exchanges equipment with a book value of $25,000 and fair market value of $40,000 for Chero Company’s land with a cost of $7,500 and fair market value of $38,000. Chero Company also paid Kim Company $2,000 in cash. Compute Kim Company’s cost of the land acquired and any gain or loss on the exchange.
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