Homework Answers
If the transaction has a commercial substance then the gain or loss on exchange of similar assets will be recorded. The gain or loss in that case will be difference between the book value and fair market value.
So, Option a is correct answer.
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A gain or loss on the exchange of similar assets will be recorded if the transaction...
Asset Traded for Similar Asset A printing press priced at a fair market value of $380,100...
Asset Traded for Similar Asset A printing press priced at a fair market value of $380,100 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press. a. Assuming that the trade-in allowance is $15,200, what is the amount of cash given? b. Assuming that the book value of the press traded in is $16,100, what is the gain...
Asset Traded for Similar Asset WN A printing press priced at a fair market value of $587,100 is acquired in a transacti...
Asset Traded for Similar Asset WN A printing press priced at a fair market value of $587,100 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press. a. Assuming that the trade-in allowance is $258,300, what is the amount of cash given? b. Assuming that the book value of the press traded in is $232,500, what is the...
Asset Traded for Similar Asset A printing press priced at a fair market value of $492,300...
Asset Traded for Similar Asset A printing press priced at a fair market value of $492,300 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press. a. Assuming that the trade-in allowance is $216,600, what is the amount of cash given? b. Assuming that the book value of the press traded in is $194,900, what is the gain...
Below is information relative to an exchange of similar assets by Grand Forks Corp. Assume the...
Below is information relative to an exchange of similar assets by Grand Forks Corp. Assume the exchange has commercial substance. Old Equipment Cash Book Value Fair Value Paid Case A $ 50,600 $ 59,500 $ 15,900 Case B $ 39,000 $ 34,400 $ 8,800 In Case B, Grand Forks would record a gain/(loss) of: Multiple Choice $ 4,600. $(4,200). $(4,600). $ 4,200.
Which of the following statements regarding the exchange of non-monetary assets is true? a) Determining commercial...
Which of the following statements regarding the exchange of non-monetary assets is true? a) Determining commercial substance for a transaction is based on professional judgment. b) All non-monetary exchanges of assets are considered incidental to the company’s ordinary business activities. c) The transaction must have commercial substance in order for the exchange to occur. d) All transactions will result in a gain or loss being realized.
Which of the following statements regarding the exchange of non-monetary assets is true? a) Determining commercial...
Which of the following statements regarding the exchange of non-monetary assets is true? a) Determining commercial substance for a transaction is based on professional judgment. b) All non-monetary exchanges of assets are considered incidental to the company’s ordinary business activities. c) The transaction must have commercial substance in order for the exchange to occur. d) All transactions will result in a gain or loss being realized.
Which of the following statements regarding the exchange of non-monetary assets is true? a) Determining commercial...
Which of the following statements regarding the exchange of non-monetary assets is true? a) Determining commercial substance for a transaction is based on professional judgment. b) All non-monetary exchanges of assets are considered incidental to the company’s ordinary business activities. c) The transaction must have commercial substance in order for the exchange to occur. d) All transactions will result in a gain or loss being realized.
1. Asset Traded for Similar Asset A printing press priced at a fair market value of...
1. Asset Traded for Similar Asset A printing press priced at a fair market value of $380,100 is acquired in a transaction that has commerclal substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press 3. a. Assuming that the trade-in allowance is $15,200, what is the amount of cash given? 4. b. Assuming that the book value of the press traded in is S16,100, what...
International Inc. and Jodstar are exchanging productive assets. The exchange lacks commercial substance. Jodstar paid I...
International Inc. and Jodstar are exchanging productive assets. The exchange lacks commercial substance. Jodstar paid International $8,000 boot. Here is the information on the assets being exchanged: International – Asset I Jodstar – Asset J Original cost 50,000 50,000 Accumulated depreciation 19,000 25,000 Fair value 40,000 32,000 Potential gain (loss) Record the entry for each party to record the exchange: International entry to record acquisition of asset J: Jodstar entry to record acquisition of Asset I:
Horton Stores exchanged land and cash of $5,600 for similar land. The book value and the...
Horton Stores exchanged land and cash of $5,600 for similar land. The book value and the fair value of the land were $88,900 and $100,600, respectively. Assuming that the exchange lacks commercial substance, Horton would record land—new and a gain/(loss) on exchange of assets in the amounts of: Land Gain/(loss) a.$106,200 $0 b.$106,200 $11,700 c.$94,500 $0 d.$94,500 $11,700
Asset Traded for Similar Asset A printing press priced at a fair market value of $380,100 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press. a. Assuming that the trade-in allowance is $15,200, what is the amount of cash given? b. Assuming that the book value of the press traded in is $16,100, what is the gain...
Asset Traded for Similar Asset WN A printing press priced at a fair market value of $587,100 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press. a. Assuming that the trade-in allowance is $258,300, what is the amount of cash given? b. Assuming that the book value of the press traded in is $232,500, what is the...
Asset Traded for Similar Asset A printing press priced at a fair market value of $492,300 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press. a. Assuming that the trade-in allowance is $216,600, what is the amount of cash given? b. Assuming that the book value of the press traded in is $194,900, what is the gain...
1. Asset Traded for Similar Asset A printing press priced at a fair market value of $380,100 is acquired in a transaction that has commerclal substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press 3. a. Assuming that the trade-in allowance is $15,200, what is the amount of cash given? 4. b. Assuming that the book value of the press traded in is S16,100, what...
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