CK exchanged Truck A with SD for Truck B; SD paid cash to CK of $9,600.Assume that the following data relate to the transaction: $\begin{array} { lll }
\text { Carrying value of Truck $ A $ to JB..}&\$8,000\
\text { Carrying Value of Truck B to SD.}&3,600\
\text {Fair market value of Truck B (per "blue book"). }&2,400\
\end{array}$
(A) CK should account for this transaction (assume similar assets) as a:
A.100% exchange.
B.1/5 sale,4/5 exchange.
C.100% Sale.
D.4/5 sale,1/5 exchange.
(B) Give the entry to record the exchange in the accounts of CK.
(C) Give the entry to record the exchange in the accounts of SD.

Question

CK exchanged Truck A with SD for Truck B; SD paid cash to CK of $9,600.Assume that the following data relate to the transaction: $\begin{array} { lll  } 
 \text { Carrying value of Truck $ A $ to JB..}&\$8,000\
 \text { Carrying Value of Truck B to SD.}&3,600\
 \text {Fair market value of Truck B (per "blue book"). }&2,400\
\end{array}$
 (A) CK should account for this transaction (assume similar assets) as a:
A.100% exchange.
B.1/5 sale,4/5 exchange.
C.100% Sale.
D.4/5 sale,1/5 exchange.
(B) Give the entry to record the exchange in the accounts of CK.
(C) Give the entry to record the exchange in the accounts of SD.

Quizplus · Accepted Answer

The Answer of CK exchanged Truck A with SD for Truck B; SD paid cash to CK of $9,600.Assume that the following data relate to the transaction: $\begin{array} { lll  } 
 \text { Carrying value of Truck $ A $ to JB..}&\$8,000\
 \text { Carrying Value of Truck B to SD.}&3,600\
 \text {Fair market value of Truck B (per "blue book"). }&2,400\
\end{array}$
 (A) CK should account for this transaction (assume similar assets) as a:
A.100% exchange.
B.1/5 sale,4/5 exchange.
C.100% Sale.
D.4/5 sale,1/5 exchange.
(B) Give the entry to record the exchange in the accounts of CK.
(C) Give the entry to record the exchange in the accounts of SD.

CK Exchanged Truck a with SD for Truck B; SD