Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hinrich Company traded machinery with original cost of $145,000 and accumulated depreciation of $25,000. It received in exchange from Noach Company a machine with a

Hinrich Company traded machinery with original cost of $145,000 and accumulated depreciation of $25,000. It received in exchange from Noach Company a machine with a fair value of $180,000 and cash of $20,000. Hinrich expects its future cash flows not to change as a result of this transaction. Noachs machine has a book value of $190,000. What amount of gain or loss should Hinrich recognize on the exchange? a. $ -0- *b. $8,000 gain c. $20,000 loss d. $80,000 gain Please explain why the answer is B; the other answer on this site has incorrect work

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Laboratory Auditing For Quality And Regulatory Compliance

Authors: Donald C. Singer, Raluca-Ioana Stefan, Jacobus F. Van Staden

1st Edition

0367392461, 978-0367392468

More Books

Students also viewed these Accounting questions