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Please do it by type not pics. 1.Wille Co. trades a used truck for a used...

Please do it by type not pics.

1.Wille Co. trades a used truck for a used car. The trade has been decided to lack commercial substance. The used truck had an original cost of $15,000 and accumulated depreciation of $7,500. The used truck has a fair value of $11,000. The car has a fair value of $9,000. In addition to the car, you receive $2,000. Calculate the amount of gain that will be recognized.

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Answer #1

Answer : gain recognised is $0

Wille co traded a used truck fo used car you follow step by step procedure  

Step1 you calculate the value of used truck

($15000-7500 = $ 7500) but the fair value of truck is 11000

Step2: calculate the received value from car

$9000+$2000 = $ 11,000

Step3: compare the both values you calculated in Step1 and step2  

Step4 : $0 gain is recognised ( received value - fair value of truck

=$11000 - $11000 = $0)

  

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