rate is 30%. What amounts should Dahl report as gain on
exchange of the vans?
Question 12
On July 1, 2004, Balt Co. exchanged a truck for 25 shares of
Ace Corp.'s common stock. Assume commercial substance.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, 2004, 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, 2004,
balance sheet as investment in Ace?
Question 13
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