Backhoe Construction Company recently exchanged an old truck,which cost $118,000 and was one-third depreciated,and paid $80,000 cash for a used crane having a current fair value of $140,000.Assuming the exchange has commercial substance,at what amount should the crane be recorded on the books of Backhoe?
A) $80,000
B) $118,000
C) $140,000
D) $152,000

Question

Quizplus · Accepted Answer

The crane should be recorded at its fair value, which is $140,000.

Backhoe Construction Company Recently Exchanged an Old Truck,which Cost $118,000