[Knight4CPA]

Question – On July 1, 20X1, Balt Co. exchanged a truck for 25 shares of Ace Corp.’s common stock. On that date, the truck’s carrying amount was $2,500, and its fair value was $3,000. Also, the book value of Ace’s stock was $60 per share. On December 31, 20X1, Ace had 250 shares of common stock outstanding and its book value per share was $50. What amount should Balt report in its December 31, 20X1, balance sheet as investment in Ace?

A. 3,000

B. 2,500

C. 1,500

D. 1,250

What would tip us testers off in this question to know this nonmonetary exchange has commercial substance? Is it that IFRS says a nonmonetary exchange of not similar items has commercial substance?

Thanks

AUD: 70, 80✔ (Expires 1/18/2017 - / Ninja MCQ / CPAExcel MCQ)
REG: 61, 70, 75✔ (Expires 2017 - Ninja MCQ / CPAExcel MCQ)
BEC: 78✔(Expires 5/17/2017 - Ninja MCQ / Becker Flashcards / NinjaNotes)
FAR: 57 (just to get trigger time I scheduled 1 week after REG) Retake 5/13/16

[lolo]

I think so yes!

My Nick name is sunshine, but the fact is I have not been in touch with it since I started this CPA exam! IT HURTS

AUD - ✔ Passed Becker self study!
BEC - ✔ Passed Becker self study!
FAR - ✔ Passed Becker self study!
REG - TBD

[Author]

Replies