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d. either the fair value of the asset given up or the asset received,
whichever one results in the largest gain (smallest loss) to the
company.
P46. Ringler Corporation exchanges one plant asset for a similar
plant asset and gives cash in the exchange. The exchange is not
expected to cause a material change in the future cash flows for either
entity. If a gain on the disposal of the old asset is indicated, the gain
will
a. be reported in the Other Revenues and Gains section of the
income statement.
b. effectively reduce the amount to be recorded as the cost of the new
asset.
c. effectively increase the amount to be recorded as the cost of the
new asset.
d. be credited directly to the owner's capital account.
47. Plant assets purchased on long-term credit contracts should
be accounted for at
a. the total value of the future payments.
b. the future amount of the future payments.
c. the present value of the future payments.
d. none of these.
48. When a plant asset is acquired by issuance of common stock,
the cost of the plant asset is properly measured by the
a. par value of the stock.