Ask Question
18 July, 13:56

Marker Corp. exchanged an old truck for a piece of equipment and cash on January 1st 2019. The truck was purchased at a cost of $24,000 and accumulated depreciation at the time of the exchange is $17,000. As compensation for the truck, Marker received a piece of equipment with a fair value of $8,000 and $500 cash. How much gain would be recognized assuming this transaction DOES have commercial substance? Do not use dollar signs or decimals when inputting your answer.

+2
Answers (1)
  1. 18 July, 14:35
    0
    There is a 1,500 gain

    Explanation:

    we have commercial subtance so we can recognize gain/loss

    these will be the numebrs of the transaction:

    truck

    purchase 24,000

    acc depreciation 17, 000

    book value 7, 000

    equipment 8,000

    cash 500

    total 8,500

    received - given up = gain/loss

    8,500 - 7,000 = 1,500 gain

    the journal entry would be

    Equipment 8,000 debit

    cash 500 debit

    acc dep truck 17,000 debit

    Truck 24,000 credit

    gain on disposal 1,500 credit
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Marker Corp. exchanged an old truck for a piece of equipment and cash on January 1st 2019. The truck was purchased at a cost of $24,000 and ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers