On March 1, Al-Quds Co. exchanged productive assets with Birzeit Co. Al-Quds's asset is referred to below as "Asset A", and Birzeit's is referred to as "Asset B". The following facts pertain to these assets. Assume the exchange lacks commercial substance. Information Al-Quds Company Birzeit Comp (Asset A) (Asset B) Original cost $200,000 $100,000 Acc. dep. to date of 90,000 30,000 exchange Fair value at date of 160,000 exchange Cash received 30,000 Cash paid 30,000 The recognized gain by Al-Quds Company is: a. $40,625 b. $9,375 c. $50,000 d. $10,000
On March 1, Al-Quds Co. exchanged productive assets with Birzeit Co. Al-Quds's asset is referred to below as "Asset A", and Birzeit's is referred to as "Asset B". The following facts pertain to these assets. Assume the exchange lacks commercial substance. Information Al-Quds Company Birzeit Comp (Asset A) (Asset B) Original cost $200,000 $100,000 Acc. dep. to date of 90,000 30,000 exchange Fair value at date of 160,000 exchange Cash received 30,000 Cash paid 30,000 The recognized gain by Al-Quds Company is: a. $40,625 b. $9,375 c. $50,000 d. $10,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On March 1, Al-Quds Co. exchanged productive assets with Birzeit Co. Al-Quds's asset is referred to below as "Asset A", and Birzeit's is referred to as "Asset B". The following facts pertain to these assets. Assume the exchange lacks commercial substance. Information Al-Quds Company Birzeit Comp (Asset A) (Asset B) Original cost $200,000 $100,000 Acc. dep. to date of 90,000 30,000 exchange Fair value at date of 160,000 exchange Cash received 30,000 Cash paid 30,000 The recognized gain by Al-Quds Company is: a. $40,625 b. $9,375 c. $50,000 d. $10,000
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