On December 31, 2004, a building owned by Carr, Inc. was
destroyed by fire. Carr paid $12,000 for removal and cleanup
costs. The building had a book value of $250,000 and a fair
value of $280,000 on December 31, 2004. What amount should
Carr use to determine the gain or loss on this involuntary
conversion?
Question 14
On July 1, 2005, Glen Corp. leased a new machine from Ryan
Corp. The lease contains the following information: No
bargain purchase option is provided, and the machine reverts
to Ryan when the lease expires. What amount should Glen
record as a capitalized leased asset at inception of the lease?
Question 15
Scott Co. exchanged nonmonetary assets with Dale Co. No cash
was exchanged. There is commercial substance to the
exchange. The carrying amount of the asset surrendered by
Scott exceeded both the fair value of the asset received and
Dale's carrying amount of that asset. Scott should recognize
the difference between the carrying amount of the asset it
surrendered and
Question 16
Lease A does not contain a purchase option, but the lease term
is equal to 90 percent of the estimated economic life of the
leased property. Lease B does not transfer ownership of the
property to the lessee by the end of the lease term, but the lease