[rafiv900]

Amble, Inc. exchanged a truck with a carrying amount of $12,000and fair value of $20,000 for truck and $2,500 cash. The cash flows from the new truck are not expected to be significantly different for the cash flows of the old truck. The FV of the truck received was $17,500. At what amount should Amble record the truck received in the exchange?

Solution:

Truck new 10,500

Cash 2,500 *

Truck (old) 12,000*

Gain in sale 1,000

I can identify the entries marked with *. I understand that there’s a formula to calculate the gain and the Truck cost (new). But I think there’s a way to avoid the formulas. Please help me, Thank you!!!

Journey Started - June 2015
FAR - TBD
AUD - January 20, 2016
BEC - TBD
REG - TBD