Question
Beyers Manufacturing traded machinery with a book value of $120,000 (cost $480,000 and accumulated depreciation of $360,000) and a fair value of $200,000. In exchange,
Beyers Manufacturing traded machinery with a book value of $120,000 (cost $480,000 and accumulated depreciation of $360,000) and a fair value of $200,000. In exchange, it received a machine with a fair value of $180,000 and cash of $20,000. Assuming the transaction lacked commercial substance, what amount of gain would Beyers recognize on the exchange?
| A. | $20,000 | |
| B. | $80,000 | |
| C. | $8,000 | |
| D. | $0 | |
| E. | $8,889 |
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CISA Certified Information Systems Auditor Study Guide
Authors: David L. Cannon, Timothy S. Bergmann, Brady Pamplin
1st Edition
0782144381, 978-0782144383
