### CFA Practice Question

There are 520 practice questions for this study session.

### CFA Practice Question

Interstate Transportation Company exchanged a number of used trucks plus cash for vacant land that might be used for a future plant site. The trucks have a combined book value of \$42,000 (cost \$64,000, less \$22,000 accumulated depreciation) and estimated market value of \$49,000. Interstate must pay \$17,000 cash and the trucks for the land. How much should Interstate record as the land's value?
A. \$66,000
B. \$81,000 book value and \$22,000 accumulated depreciation
C. \$59,000
Explanation: \$49,000 + \$17,000 = \$66,000

The cost of a non-monetary asset acquired in exchange for a dissimilar non-monetary asset is usually recorded at the fair market value of the asset given up, and a gain or loss is recognized (in this case, a gain on the disposal of the trucks: \$49,000 - \$42,000 = \$7,000).

User Comment
schweitzdm Dang. went with lower of cost or market regarding the trucks.