Answer to Question #274979 in Accounting for Riley

Question

The company purchased furniture and fixtures to use in one of its stores for 440,000 in January of 20X5. The furniture and fixtures were being depreciated using the straight-line method over ten years with a residual value of 10,000. In December 20X9, Gameplay decided to close the location and entered into an exchange agreement with Allero Corporation. Allero agreed to give Gameplay vehicles with a fair value of 200,000 and cash of 50,000 in exchange for the furniture and fixtures from this store. The furniture and fixtures have an estimated fair value of 250,000 on the date of exchange. a. Make the depreciation entry for the furniture and fixtures that would be necessary in December 20X9, assuming that no entries have been made during the year. b. Determine the book value of the furniture and fixtures on the date of exchange. c. Record the journal entry Gameplay would make for this exchange. d. Where would Gameplay report the gain or loss you determined in part c. above?

Answer 1

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