City Auto Parts recently traded in store fixtures.The exchange had commercial substance.The old fixtures had a cost of $52,000 and accumulated depreciation of $16,000.City paid $110,000 for the new store fixtures.These new fixtures had a market value of $113,000.There is a loss of $33,000 on this exchange.

Question

Quizplus · Accepted Answer

The loss on the exchange is calculated as the difference between the carrying amount of the old fixtures ($52,000 - $16,000 = $36,000) and the fair value of the new fixtures ($113,000), which is $33,000.

City Auto Parts Recently Traded in Store Fixtures