Below Is Information Relative to an Exchange of Similar Assets

question 50

Multiple Choice

Below is information relative to an exchange of similar assets by Grand Forks Corp. Assume the exchange has commercial substance. $$\begin{array} { l l l c } & { \text { Old Equipment } }& & \text { Cash } \\ & \text { Book Value } & \text { Fair Value } & \text { Paid } \\\text { Case A }& \$ 50,000 & \$ 60,000 & \$ 15,000 \\\text { Case B } & \$ 40,000 & \$ 35,000 & \$ 8,000\end{array}$$
-In Case B, Grand Forks would record a gain/(loss) of:

• A) $5,000.
• B) $3,000.
• C) ($5,000).
• D) ($3,000).

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