China Inn and Midwest Chicken exchanged assets. Midwest Chicken received equipment and gave a delivery truck. The fair value and book value of the delivery truck given were $23,400 and $26,700 (original cost of $31,600 less accumulated depreciation of $4,900), respectively. To equalize market values of the exchanged assets, Midwest Chicken received $7,400 in cash from China Inn. a. At what amount did Midwest Chicken record the equipment?
b. How much gain or loss did Midwest Chicken recognize on the exchange?

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?