Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. when assets are exchanged in a transaction involvi

When assets are exchanged in a transaction involving commercial substance, how is the gain or loss...

Free

50.1K

Verified Solution

Question

Accounting

When assets are exchanged in a transaction involving commercialsubstance, how is the gain or loss on disposal of plant assetscomputed?

Answer & Explanation Solved by verified expert
4.1 Ratings (557 Votes)

--The gain or loss on asset exchanged in transaction involving commercial substance is calculated as shown below:

A Fair Value of new asset received
LESS:
Original Cost of asst given up in exchange
Less: Accumulated Depreciation on that asset
B Book Value of Asset exchanged
C Cash paid, if any
D = A - B - C Gain (Loss) on exchange

Lets, take an example.

A Fair Value of new asset received $                 112,500
LESS:
Original Cost of asst given up in exchange $                 144,000
Less: Accumulated Depreciation on that asset $                   60,000
B Book Value of Asset exchanged $                    84,000
C Cash paid, if any $                    22,500
D = A - B - C Gain (Loss) on exchange $                      6,000

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

4. Under each of the following conditions, please predict the effect the mutation will have on...

Biology
1.2K views

3) You have four tubes containing the same DNA at the sameconcentrationin each tube (pH 7.5)...

Physics
1.2K views

In a standard YDSE setup if the screen is kept tilted as shown find the...

Physics
1.2K views

13 Find the total energy stored in the capacitors given in the circuit Fig 5...

Geometry
1.2K views

6 The circle shown has a radius of 15 in ZAOB intercepts an arc with...

Calculus
1.2K views

What is 4 radians converted to degrees If necessary round your answer to the nearest...

Algebra
1.2K views

Marchetta Bakery uses fine sugar brown sugar confectioner s sugar and honey The purchase prices...

Accounting
1.2K views

Question 25) Your audit client shipped some merchandise to a customer on December 28 of...

Accounting
1.2K views

Question 8 5 Refer to Exhibit 4.1. What is the firm's Tie? Do not round...

Accounting
1.2K views

Xia Co. currently buys a component part for $10 per unit. Xia believes that making...

Accounting
1.2K views

Sellers Company is planning on investing in a new 2-year project, Project Flea. Project Flea...

Accounting
1.2K views

Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at...