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Two independent companies, ABC Co, and XYZ Co, exchange buildings. The transaction lacks commercial substance. An appraiser was hired, and from his report and the
Two independent companies, ABC Co, and XYZ Co, exchange buildings. The transaction lacks commercial substance. An appraiser was hired, and from his report and the companies' records, the following information was obtained: Cost Accumulated Depreciation Fair value based upon appraisal ABC's Building $120,000 40.000 100,000 XYZ's Building $90,000 40.000 85,000 The exchange was made, and based on the difference in appraised value, XYZ Co. paid $15,000 to ABC Co. The new building should be recorded on ABC's books at: Select one a $62,000 b. 582,000 OC $68,000 d. $85,000 e $50,000
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