Question:

Anderson Company exchanged equipment used in its manufacturing operations for similar equipment used in the operations of Woods Corp. The fair value of Woods' equipment was $45,000. The following information pertains to the exchange:

Anderson Co.

Equipment (cost) $ 64,000

Accumulated depreciation 28,500

Woods Corp.

Equipment (cost) $ 64,000

Accumulated depreciation17,000

Determine the following for each company involved in the exchange.

	Anderson	Woods
Part 1. Assuming the exchange lacks commercial substance, and Woods pays $5,000 cash, determine: Gain/Loss on Exchange Cost of New Asset	$ ______________ gain/loss $_______________ New Asset	$____________ Gain/loss $____________ New Asset