Melvin motor sales exchanged a car from its inventory for a, Ask an Expert

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Melvin Motor Sales exchanged a car from its inventory for a computer to be used as a noncurrent operating asset. The following information relates to this exchange that took place on July 31, 2011:

Carrying amount of the car $30,000
Listed selling price of the car $45,000
Fair Value of the Computer $43,000
Cash difference paid b Melvin Motor $5,000

The exchange has commercial substance.

On July 31, 2011, how much profit should Melvin recognize on this exchange?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M962634

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