Question

Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $32,000 (original cost of $83,000 less accumulated depreciation of $51,000) and $23,000, respectively. Assume Calaveras paid $9,000 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks

Answer 1

Answer:

the amount paid for pickup truck is $32,000

Explanation:

The computation of the amount paid for pickup truck is shown below

= Fair value of machinery + cash paid

= $23,000 + $9,000

= $32,000

hence, the amount paid for pickup truck is $32,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Rest of the values would be ignored