Question
Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Clark Co. Keys Inc. Equipment given up: Equipment (original cost) $72,000 $84,000
Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows.
| Clark Co. | Keys Inc. | |
|---|---|---|
| Equipment given up: | ||
| Equipment (original cost) | $72,000 | $84,000 |
| Accumulated depreciation | 24,000 | 28,800 |
| Fair value | 43,200 | 57,600 |
| Cash exchanged | (14,400) | 14,400 |
Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance.
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Financial And Managerial Accounting The Basis For Business Decisions
Authors: Jan Williams, Sue Haka, Mark S Bettner
13th Edition
0072942827, 978-0072942828
