Mary Co. exchanged a piece of equipment that had cost $40,000 now 75% depreciated) for a truck with a current appraised value of $18,000. Mary Co. gave the other company the piece of equipment, which had a fair value of $12,000 at the time of the exchange, and $10,000 cash. Mary Co. should record

Question

Quizplus · Accepted Answer

The truck has a fair value of $18,000, and Mary Co. gave up equipment worth $12,000 and $10,000 cash. So, Mary Co. has a gain of $18,000 - $12,000 - $10,000 = $2,000.

Mary Co Exchanged a Piece of Equipment That Had Cost $40,000