Question
Meriwether Mousepads exchanges their equipment with Tennis Corp, for another piece of equipment. In addition, Meriwether also pays $15,500 cash to Tennis for the exchange.
Meriwether Mousepads exchanges their equipment with Tennis Corp, for another piece of equipment. In addition, Meriwether also pays $15,500 cash to Tennis for the exchange. The following information pertains to the asset given up by each company:
| Meriwether | Tennis | |
| Original cost | 50,000 | 42,000 |
| Accumulated Depreciation | 2,500 | 4,200 |
| Fair Value | 32,000 | 47,500 |
What is the amount of gain or loss recognized by Tennis if the exchange has commercial substance?
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
