Question

Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. Old Equipment Cash Book Value Fair Value Received Equipment A $ 74,100 $ 81,600 $ 11,100 Equipment B $ 61,900 $ 55,600 $ 10,000 For Equipment B, Pensacola would record a gain/(loss) of:

Answer 1

Loss of 6300

Step-by-step explanation:

Give the following :

Equipment - -- B/Val - - F/Value - - cash Received Equipment A - - 74,100 - - 81,600 - - 11,100 Equipment B - - 61,900 - - 55,600 - - 10,000

Book value of equipment B = 61,900

Loss / gain :

(Fair value - book value ) = (55,600 - 61,900)

Loss / gain = - 6,300

Loss = (6300)