Thank you for visiting Dimarco Corporation exchanged old equipment that cost 250 000 accumulated depreciation of 140 000 for new equipment The fair value of the new equipment is. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
Final answer:
The Dimarco Corporation's exchange of old equipment for new resulted in a gain of $15,000, which is the difference between the book value of the old equipment ($110,000) and the fair value of the new equipment ($125,000).
Explanation:
To calculate the gain or loss on the exchange of equipment by Dimarco Corporation, we need to determine the book value of the old equipment and compare that to the fair value of the new equipment received in the exchange. The book value of the old equipment is calculated by subtracting the accumulated depreciation from the cost of the equipment. In this case, the book value is $110,000 ($250,000 cost - $140,000 accumulated depreciation). The fair value of the new equipment, which is the value at which the asset could be exchanged, is given as $125,000.
After comparing the book value of the old equipment to the fair value of the new equipment, we determine the gain or loss on the exchange. Here, the fair value of the new equipment ($125,000) is higher than the book value of the old equipment ($110,000), resulting in a gain of $25,000 on the exchange of equipment.
Therefore, the correct answer to the question would be an option not listed in the choices provided, which is a $25,000 gain.
Thank you for reading the article Dimarco Corporation exchanged old equipment that cost 250 000 accumulated depreciation of 140 000 for new equipment The fair value of the new equipment is. We hope the information provided is useful and helps you understand this topic better. Feel free to explore more helpful content on our website!
- You are operating a recreational vessel less than 39 4 feet long on federally controlled waters Which of the following is a legal sound device
- Which step should a food worker complete to prevent cross contact when preparing and serving an allergen free meal A Clean and sanitize all surfaces
- For one month Siera calculated her hometown s average high temperature in degrees Fahrenheit She wants to convert that temperature from degrees Fahrenheit to degrees
Rewritten by : Jeany
