Bramble Corp. received $93000 in cash and a used computer with a fair value of $348000 from Blossom Company for Bramble Corp.'s
existing computer having a fair value of $441000 and an undepreciated cost of $413400 recorded on its books. The transaction has no commercial substance. How much gain should Bramble recognize on this exchange, and at what amount should the acquired computer be recorded, respectively
A. Calculation for How much gain should Bramble recognize on this exchange
Recognized gain=$441000-$413400
Recognized gain=$27,600
Therefore Bramble recognize on this exchange is $27,600
B. Based on the information given we were told that the company received a used computer that has a fair value of the amount of $348000 from Blossom Company which means that the fair value amount of $348000 is what the acquired computer be recorded.
Capital gains and losses netting will have no effect on tax payable. The individual impact on tax will be same as of netting the gains and losses. The net outcome of the tax will be remain un impacted.
Adjusting entries are made at the end of an accounting period after a trial balance is prepared to adjust the revenues and expenses for the period in which they occurred.
If people's trust in the banking system is reduced due to a surge in bank failures, the money expansion resulting from a new deposit will <u>decline</u>. This happens because people lost trust and hastily withdrawn their money deposited with the bank.
