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The Bronco Corporation exchanged land for equipment. The land had a book value of $131,000 and a fair value of $172,000. Bronco received $21,000 from the owner of the equipment to complete the exchange which has commercial substance. Required: 1. What is the fair value of the equipment

Respuesta :

Parrain

Answer: $151,000

Explanation:

The fair value of the equipment is the amount that was less than the fair value of land by the amount of cash that the equipment owner had to pay to complete the transaction:

Fair value of equipment = Fair value of land - Cash paid by owner of equipment

= 172,000 - 21,000

= $151,000

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