Ibarra Carpet traded cleaning equipment with a cost of $27,000 and accumulated depreciation of $5,250 for new equipment with a fair market value of $14,500.Assuming the exchange lacks commercial substance,Ibarra should record the new equipment at
A) $14,750.
B) $13,750.
C) $14,500.
D) $7,500.

Question

Quizplus · Accepted Answer

The new equipment should be recorded at its fair market value, which is $14,500.

Ibarra Carpet Traded Cleaning Equipment with a Cost of $27,000