Answer:
Check the explanation
Step-by-step explanation:
Consider the problem A. It deals with a tractor. $39,000 will be registered as the original cost. Till date depreciation charged is $21,500. Difference amid initial cost and accumulated depreciation is written down value.
Original cost $39,000
Less: Accumulated depreciation $21,500
Written down value $17,500
Less: Fair value of old tractor $10,100
Loss $7,400
Answer 1.2:
A new tractor has been replaced for an old one. The Cash of $10,100 has been paid. therefore cost of the new truck will be fair value of old truck plus cash paid. consequently initial cost of new truck is:
Amount paid in cash $31,000
Add: Fair value of old truck $10,100
Initial value of new tractor $41,100
Answer:of part 2.1:
If the fair value of old tractor is $25,000 instead of $10,100, then profit or gain from exchange of old truck is:
Fair value of old tractor $25,000
Less: written down value of old tractor $17,500
Gain from tractor $7,500
Answer of 2.2:
As old truck has been exchanged for new one, initial cost of new tractor is:
Fair value of old tractor $25,000
Add: cash paid $31,000
Initial cost of new tractor $46,000
Case B:
Fair value $810,000
Less: book value $555,000
Gain from exchange of old land $255,000
Answer 1.2:
Initial cost of new land exchanged for old one is:
Fair value of old land $810,000
Add: Cash paid for new land $61,000
Cost of new land $871,000