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Due to an office redesign in the Ontario building, FFI traded some old equipment for different...

Due to an office redesign in the Ontario building, FFI traded some old equipment for different equipment with a similar life and value in use. The fair value of the equipment disposed of was $5,000. The cost of this equipment was $7,000, and the accumulated depreciation on the equipment at December 31, 2019, was $3,000. This transaction was not recorded in the books of account. No entry was made to record the exchange. FFI uses ASPE.

Required: Determine the impact on the company’s assets, liabilities, and net income of measuring the transaction with the carrying value versus the fair value.  

Instruction: Write increase, decrease, or no impact in each box.

Carrying

Value

Fair

Value

Assets

Liabilities

Net income
business   accounting   
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