Hardin Company Received $40,000 in Cash and a Used Computer

question 112

Multiple Choice

Hardin Company received $40,000 in cash and a used computer with a fair value of $120,000 from Page Corporation for Hardin Company's existing computer having a fair value of $160,000 and an undepreciated cost of $150,000 recorded on its books.The transaction has no commercial substance.How much gain should Hardin recognize on this exchange, and at what amount should the acquired computer be recorded, respectively?

• A)$0 and $110,000
• B)$769 and $110,769
• C)$10,000 and $120,000
• D)$40,000 and $150,000

---

Definitions:

Asylums

Historically, institutions meant to house individuals with mental illnesses, often under poor conditions; has evolved into modern day psychiatric hospitals with a focus on treatment and rehabilitation.

Overcrowding

A situation where too many people live in too little space, often leading to a range of social and health problems.

1500s

The 16th century, a period marked significant cultural, political, and technological changes in history.

Psychopathology

An abnormal pattern of functioning that may be described as deviant, distressful, dysfunctional, and/or dangerous.