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Alamos Co. exchanged equipment and $18,700 cash for similar equipment. The book value and the fair...

Alamos Co. exchanged equipment and $18,700 cash for similar equipment. The book value and the fair value of the old equipment were $81,400 and $90,800, respectively.

Assuming that the exchange lacks commercial substance, Alamos would record a gain/(loss) of:

$(9,400).

$ 9,400.

$ 0.

$28,100.

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Answer #1
Answer
The Correct Option is B: $ 9,400
Explanation
Calculate gain (loss) Of exchange :
Old value of exchange ($18,700+$ 81,400) $     100,100
Fair value of exchange ($ 90,800+$18,700) $     109,500
Gain on exchange $         9,400

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