Concord Inc
Subject:AccountingPrice:2.87 Bought7
Concord Inc. and Ivanhoe Co. have an exchange with no commercial substance. The asset given up by Concord Inc. has a book value of $58000 and a fair value of $93000. The asset given up by Ivanhoe Co. has a book value of $123000 and a fair value of $108000. Boot of $28000 is received by Ivanhoe Co.What amount should Concord Inc. record for the asset received?
$86,000
$108,000
$93,000
$123,000
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Answer =$86000
Since there is not commercial substance Concord Inc. should record no gain and loss on asset given up and new asset should be recorded at book value of asset given up plus cash paid to Ivanhoe Co.
=$58000+28000
=$86000
