Amble Inc exchanged a truck with a book value of 9000 and a

Amble Inc. exchanged a truck with a book value of $9,000 and a fair value of $12,000 for a truck and $2,000 cash. The exchange has commercial substance. At what amount should Amble record the truck received?

a) $5,500.

b) $7,500.

c) $9,500.

d) $11,000.

Solution

Calculate amount that amble record the truck received:

Amount record = Book valu of old assets+cash

                       = 9000+2000

Amount record = $11,000

so answer is d) $11000