An exchange of similar productive assets was completed between Company A and Company Z. Prior to the exchange, Company A owned Asset A; Company Z owned Asset Z. Companies A and Z swapped Assets A and Z. Company A also paid $44,000 cash to Company Z in the exchange.
Additional information:
Asset A Asset Z
Book Value $60,000 $94,000
Market Value $55,000 $99,000
In recording the exchange, Company A will report:
a. a loss of $5,000
b. a portion of a $5,000 loss
c. a gain of $44,000
d. a loss of $99,000
Answer: A
Accounting
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