In the books oh Headland Industries | |||||||
General Journal | |||||||
Date | Description | Debit | Credit | ||||
Machinery | $ 65,000 | ||||||
Equipment | $ 65,000 | ||||||
Cash | $ 1,30,000 | ||||||
(being assets 1 & 2 acquired for cash) | |||||||
Machinery | $ 52,000 | ||||||
Cash | $ 13,000 | ||||||
Note Payable | $ 39,000 | ||||||
(being asset 3 acquired) | |||||||
Machinery | $ 68,250 | ||||||
Cash | $ 13,000 | ||||||
Old machinery (book value) | $ 78,000 | ||||||
Gain on exchange | $ 3,250 | ||||||
(being asset 4 acquired) | |||||||
Equipment (100 shares @ $ 14) | $ 1,400 | ||||||
Common Stock (100 shares of $10) | $ 1,000 | ||||||
Additional paid in capital | $ 400 | ||||||
(being asset 5 purchased) | |||||||
Building | $ 13,78,000 | ||||||
Cash | $ 13,78,000 | ||||||
(being building constructed) | |||||||
Working for Asset 4 | |||||||
Calculation of gain | |||||||
Gain = fair value of old asset- cost value of old asset | |||||||
= 104000-78000 | |||||||
=26000 | |||||||
Percentage of gain = Cash received/ fair value of old asset | |||||||
=13000/104000 | |||||||
=12.5% | |||||||
Since gain is less than 25% and exchange lacks commercial substance then gain is recognised on proportional basis | |||||||
Proportionate gain = Total gain * percentage of gain | |||||||
=26000*12.5% | |||||||
=3250 | |||||||
Cost of new machinery acquired = book value of old asset+ gain- cash received | |||||||
68250 | |||||||
Headland Industries purchased the following assets and constructed a building as well. All this was done...
Grouper Industries purchased the following and constructed a building as well. All this was done during the current year Assets 1 and 2: These assets were purchased as a mesum for $190,000 cash. The following information was gathered. Initial Cost on Depreciation to Book Value on Description Seller's Books Date on seller's Books Seller's Books Appraised Value $190.000 395.000 $95.000 114.000 19.000 95,000 57.000 Event Asset 3: This machine was acquired by making a $19,000 down payment and issuing a...
Sheridan Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $200,000 cash. The following information was gathered. Description Initial Cost on Seller’s Books Depreciation to Date on Seller’s Books Book Value on Seller’s Books Appraised Value Machinery $200,000 $100,000 $100,000 $180,000 Equipment 120,000 20,000 100,000 60,000 Asset 3: This machine was acquired by making a $20,000 down...
Exercise 10-16
Martinez Industries purchased the following assets and
constructed a building as well. All this was done during the
current year.
Exercise 10-16 Martinez Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $140,000 cash. The following information was gathered. Book Value on Seller's Books Description Machinery Equipment Initial Cost on Depreciation to Seller's BooksDate on...
E10-16B (L03,4) (Asset Acquisition) Ogden Industries purchased
the following assets and constructed a building as well. All this
was done during the current year.
Asset 3
This machine was acquired by making a $25,000 down payment and
issuing a $75,000, 1-year, zero-interest-bearing note. The note is
to be paid off in at the end of the first year. It was estimated
that the asset could have been purchased outright for $91,000.
Asset 4
This machinery was acquired by trading in...
I need help with the numbers for the blue boxes.
Thank you !!
Sunland Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $280,000 cash. The following information was gathered. Initial Cost on Description Seller's Books Machinery $280,000 $280,000 Equipment 168,000 Depreciation to Date on Seller's Books $140,000 28,000 Book Value on Seller's Books Appraised Value $140,000...
blem I (Asset Acquisition) Hayes Industries purchased the following assets and constructed a building as well. All this was done during the current year. Instructions Record the acquisition of each of these assets. Assets 1 and 2: These assets were purchased as a lump sum for $100.000 cash. The following information was gathered. Description Initial Cost on Depreciation to Date on Book Value on Appraised Seller's Books Seller's Books Seller's Books Value Machinery $100,000 $50,000 $50,000 $90,000 Equipment 60,000 10,000...
Daily Assignment (1/27/2020) Tow can either a wer the problems directly on this document or use other paper Scan and submit on Canvas by 8 AM on Wednesday, January 27 Problem 1 (Asset Acquisition) yes Industries purchased the following assets and constructed a building as well. All this was done during the current year. Instructions Record the acquisition of each of these assets. Assets 1 and 2: These assets were purchased as a lump sum for $100.000 cash. The following...
Need help completing Building
and Automobiles section
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2017: Accumulated Plant As set Depreciation Land Land improvements Building Machinery and equipment Automobiles $ 380,000 195,000 1,650,000 1,164,000 165,000 48,000 353,000 408,000 115, 000 Transactions during 2018 were as follows a. On January 2, 2018, machinery and equipment were purchased at a total invoice cost of $275,000, which included a $5,800 charge b. On March...
Headland Carpets Inc. made a lump-sum purchase of several assets for a total price of $126,800. The assets purchased are as follows: Building Land Machinery Book Value Fair Value $58,900 $72,400 36,900 41,600 26,300 21,500 $122,100 $135,500 At what amount should each of the three assets be recorded? (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places eg. 58,971.) Asset Cost Building Land Machinery
7. (7 points) A building was constructed on
land purchased last year at a cost of $150,000. Construction began
on January 1 and was completed on December 31. The payments to the
contractor were as follows. Date Payment 1/1 $120,000 4/1 320,000
8/1 460,000 10/1 100,000 To finance construction of the
building, a $400,000, 12% construction loan was taken out on
January 1. The loan was repaid on December 31. The firm had
$200,000 of other outstanding debt during the...