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Amble, Inc. exchanged a truck with a carrying amount of $12,000 and a fair value of $20,000 for a truck and $5,000 cash. The fair value of the truck received was $15,000. At what amount should Amble record
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Amble, Inc. exchanged a truck with a carrying amount of $12,000 and a fair value of $20,000 for a truck and $5,000 cash. The fair value of the truck received was $15,000. At what amount should Amble record the truck received in the exchange assuming the exchange?

User Rory Nolan
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1 Answer

3 votes

Answer:

$15,000

Step-by-step explanation:

The following journal entry shall be recorded in the accounts of Amble, Inc. in respect of exchange of truck.

Debit Credit

Fair value of truck purchased $15,000

Cash received on exchange $5,000

Carrying value of truck disposed $12,000

Gain on the truck disposed $8,000

User Alexey Kozhevnikov
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