Valix Finacc vol 1 Problem 15-15

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 15 Problem 15-15

Equipment - new                                                                                 1,400,000

Accumulated depreciation                                                                1,050,000

Loss on exchange                                                                                     50,000                    

         Equipment – old                                                                                               1,200,000

         Cash                                                                                                                 1,300,000

Fair value                                                                                                                     100,000

Cash payment (1,600,000 – 300,000)                                                                          1,300,000

Cost of new asset                                                                                                     1,400,000

Fair value                                                                                                                     100,000

Less: Book value                                                                                                        ( 150,000)

Loss on exchange                                                                                                      (   50,000)