Realized gain or loss on the exchange, Cost Accounting

Pauline's Pastry Shop decides to remodel its offices this year. As part of the remodeling, Pauline's trades furniture with a cost of $12,000 that had been expensed in the year of purchase (Section 179 expense election) for new furniture costing $22,000. Pauline's receives a $5,000 credit (instead of a cash receipt) for the old furniture and borrows the remaining $17,000 from Easy Finance Company.
a. What is Pauline's realized gain or loss on the old furniture? Maybe 0
b. What is Pauline's recognized on the exchange?
c. What is Pauline's deferred gain on the exchange?
d. What is the basis of the new furniture?

Posted Date: 2/18/2014 12:13:26 AM | Location : United States

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