question archive Hoyle company traded machinery with a book value of $285,000 and a fair value of $270,000
Hoyle company traded machinery with a book value of $285,000 and a fair value of $270,000
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Hoyle company traded machinery with a book value of $285,000 and a fair value of $270,000. It received in exchange from Durler Company a machine with a fair value of $300,000. Hoyle also paid cash of $30,000 in the exchange. Durler's machine has a book value of $285,000. What amount of gain or loss should Hoyle recognize on the exchange?
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Answer:
Gain (Loss) to be recognized
= Book value of asset received - (Fair value of asset given up + Cash paid)
= 285,000 - (270,000+30,000)
= 285,000 - 300,000
= loss of $15,000
