As per IAS 16, if the assets exchanged lack commercial substance, then they are not recorded art fair value | |||||||||
Carrying amount of toyota fleet = 5,78,000 | |||||||||
Journal Entry | |||||||||
Cash a/c Dr | 119,400 | ||||||||
Niissan fleet a/c Dr | 458,600 | ||||||||
To Toyota fleet a/c | 578,000 | ||||||||
(Being exchange of assets recorded) | |||||||||
The carrying amount or fair value of asset taken is not considered | |||||||||
Botella's Taxi Company exchanged a fleet of Toyota vehicles for an equal-sized fleet of Nissan vehicles...
Sam's Taxi Company exchanged a fleet of Toyota vehicles for an equal-sized fleet of Nissan vehicles from the Dave Transportaion Group. The carrying value and fair value of each fleet of vehicles on the date of the exchange are as follows: Sam's Taxi received cash of $79,500 and the Nissan fleet in exchange for the Toyota fleet. Sam's Taxi does not expect the future cash flows to change significantly as a result of this exchange and, therefore, the transaction lacks...