How much is gain on exchange recognized by feeble co

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Reference no: EM132817626

FEEBLE Co. exchanged equipment with WEAK, Inc. Pertinent data are shown below:

FEEBLE Co. WEAK, Inc.

Equipment 4,000,000 8,000,000

Accumulated depreciation 800,000 3,200,000

Carrying amount 3,200,000 4,800,000

Fair value 3,800,000 4,400,000

Cash paid by FEEBLE Co. to WEAK, Inc. 600,000 600,000

Problem 1: How much is the initial cost of the equipment received by FEEBLE Co.?

a. 4,400,000

b. 5,000,000

c. 3,800,000

d. 3,400,000

Problem 2: How much is the initial cost of the equipment received by WEAK Co.?

a. 3,800,000

b. 4,400,000

c. 5,000,000

d. 3,400,000

Problem 3: How much is gain (loss) on exchange recognized by FEEBLE Co.?

a. (600,000)

b. 600,000

c. 1,200,000

d. 0

Problem 4: How much is gain (loss) on exchange recognized by WEAK Co.?

a. (400,000)

b. 400,000

c. (1,000,000)

d. 0

Reference no: EM132817626

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