Question
On July 1, Year 1, DDC Co. exchanged a used crane for a new crane with ZN Corp. The used crane had a book value
On July 1, Year 1, DDC Co. exchanged a used crane for a new crane with ZN Corp. The used crane had a book value of $120,000 ($225,000 cost minus $105,000 accumulated depreciation) and a fair value of $125,000. The fair value of the new crane is $110,000. In addition to the exchange of the used crane, ZN paid DDC $15,000. The exchange lacks commercial substance.
How much should DDC record as the cost of the new crane in Year 1?
How much should DDC record as a gain (loss), if any, in Year 1?
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Financial Accounting and Reporting
Authors: Barry Elliott, Jamie Elliott
17th edition
978-0273778172, 027377817X, 978-1292080505
