Peter Exchanged Similar Assets with Sunshine Company in a Transaction

question 86

Multiple Choice

Peter exchanged similar assets with Sunshine Company in a transaction without commercial substance. Peter gave up equipment that had a net book value of $47,000 (fair value $49,000) and Sunshine exchanged equipment with a net book value of $36,000 (fair value $35,000) . What is the correct value at which Sunshine should record the new equipment?

• A)$35,000
• B)$36,000
• C)$47,000
• D)$49,000

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Definitions:

Nucleic Acid

Biomolecules essential to all known forms of life, including DNA and RNA, that carry genetic information necessary for growth, development, functioning, and reproduction.

Protein

Large biomolecules composed of amino acids, essential for various functions within organisms, including structural roles, enzymes, and cell signaling.

Cellulose

A complex carbohydrate composed of glucose units, forming the primary structural component of plant cell walls.

Carbohydrate

A category of macronutrients consisting of sugars, starches, and fibers found in fruits, vegetables, grains, and dairy products, serving as a primary energy source.