Homework Answers
I. (a) Commercial Substance (Teal Co.)
| Accounts | Debit | Credit |
| Equipment - New | 19,840 | |
| Accumulated Depreciation | 24,320 | |
| Equipment - Old | 35,840 | |
| Cash | 3,840 | |
| Gain on Exchange of Equipment | 4,480 |
I. (b) Commercial Substance (Flint Co.)
| Accounts | Debit | Credit |
| Equipment - New | 16,000 | |
| Cash | 3,840 | |
| Accumulated Depreciation | 12,800 | |
| Loss on Exchange of Equipment | 3,200 | |
| Equipment - Old | 35,840 |
II. (a) No Commercial Substance (Teal Co.)
| Accounts | Debit | Credit |
| Equipment - New | 15,360 | |
| Accumulated Depreciation | 24,320 | |
| Equipment - Old | 35,840 | |
| Cash | 3,840 |
II. (b) No Commercial Substance (Flint Co.)
| Accounts | Debit | Credit |
| Equipment - New | 16,000 | |
| Cash | 3,840 | |
| Accumulated Depreciation | 12,800 | |
| Loss on Exchange of Equipment | 3,200 | |
| Equipment - Old | 35,840 |
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6 Ch 10: Homework - PDR Updated Question 10 of 13 View Policies Current Attempt in...
Question 5 View Policies Current Attempt in Progress Grouper Company exchanged equipment used in its manufacturing...
Question 5 View Policies Current Attempt in Progress Grouper Company exchanged equipment used in its manufacturing operations plus $3.120 in cash for similar equipment used in the operations of Monty Company. The following information pertains to the exchange Grouper Co. Monty Co. Equipment (cost) $29,120 Accumulated depreciation $29,120 19,760 13,000 3,120 10,400 16,120 Fair value of equipment Cash given up Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial...
Send to Gradebook Question 1 View Policies Current Attempt in Progress You have two clients that...
Send to Gradebook Question 1 View Policies Current Attempt in Progress You have two clients that are considering trading machinery with each other. Although the machines are different from each other, you believe that an assessment of expected cash flows on the exchanged assets will indicate the exchange lacks commercial substance. Your clients would prefer that the exchange be deemed to have commercial substance, to allow them to record gains. Here are the facts: Original cost Accumulated depreciation Fair value...
--/1 Question 1 View Policies Current Attempt in Progress Culver Company purchased equipment on January 2,...
--/1 Question 1 View Policies Current Attempt in Progress Culver Company purchased equipment on January 2, 2016, for $113,000. The equipment had an estimated useful life of 5 years with an estimated salvage value of $11,600. Culver uses straight-line depreciation on all assets. On January 2, 2020, Culver exchanged this equipment plus $12,500 in cash for newer equipment. The old equipment has a fair value of $47,600. Prepare the journal entry to record the exchange on the books of Culver...
Exercise 10-19 Indigo Company exchanged equipment used in its manufacturing operations plus $4,26...
Exercise 10-19 Indigo Company exchanged equipment used in its manufacturing operations plus $4,260 in cash for similar equipment used in the operations of Sweet Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Indigo Co $39,760 26,980 17,750 4,260 Sweet Co. $39,760 14,200 22,010 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically...
Oriole Company exchanged equipment used in its manufacturing operations plus $3,300 in cash for similar equipment...
Oriole Company exchanged equipment used in its manufacturing operations plus $3,300 in cash for similar equipment used in the operations of Waterway Company. The following information pertains to the exchange. Oriole Waterway Co. Co. $30,800 $30,800 Equipment (cost) 20,900 11,000 Accumulated depreciation Fair value of equipment 17,050 13,750 Cash given up 3,300 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when...
Question 13 --/1 View Policies Current Attempt in Progress Flint Incorporated factored $156,000 of accounts receivable...
Question 13 --/1 View Policies Current Attempt in Progress Flint Incorporated factored $156,000 of accounts receivable with Buffalo Factors Inc. on a without-recourse basis. Buffalo assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Flint Incorporated and Buffalo Factors to record the factoring of the accounts receivable to Buffalo. (if no entry is required, select "No Entry" for the account...
Exercise 10-19 Sheffield Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for...
Exercise 10-19 Sheffield Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for similar equipment used in the operations of Tamarisk Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Sheffield Co. $33,600 22,800 15,000 3,600 Tamarisk Co. $33,600 12,000 18,600 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically...
Exercise 10-19 Oriole Company exchanged equipment used in its manufacturing operations plus $3,480 in cash for...
Exercise 10-19 Oriole Company exchanged equipment used in its manufacturing operations plus $3,480 in cash for similar equipment used in the operations of Waterway Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Oriole Co. $32,480 22,040 14,500 3,480 Waterway Co. $32,480 11,600 17,980 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically...
Kingbird Company exchanged equipment used in its manufacturing operations plus $4,140 in cash for similar equipment...
Kingbird Company exchanged equipment used in its manufacturing operations plus $4,140 in cash for similar equipment used in the operations of Oriole Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Kingbird Co $38,640 26,220 17,250 4,140 Oriole Co. $38,640 13,800 21,390 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when...
Question 12 0.83/1 View Policies Show Attempt History Current Attempt in Progress Your answer is partially...
Question 12 0.83/1 View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. Sweet Corporation traded a used truck (cost $26,400, accumulated depreciation $23,760) for a small computer with a fair value of $4.356. Sweet also paid $660 in the transaction. Prepare the journal entry to record the exchange, assuming the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No...
Question 5 View Policies Current Attempt in Progress Grouper Company exchanged equipment used in its manufacturing operations plus $3.120 in cash for similar equipment used in the operations of Monty Company. The following information pertains to the exchange Grouper Co. Monty Co. Equipment (cost) $29,120 Accumulated depreciation $29,120 19,760 13,000 3,120 10,400 16,120 Fair value of equipment Cash given up Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial...
Send to Gradebook Question 1 View Policies Current Attempt in Progress You have two clients that are considering trading machinery with each other. Although the machines are different from each other, you believe that an assessment of expected cash flows on the exchanged assets will indicate the exchange lacks commercial substance. Your clients would prefer that the exchange be deemed to have commercial substance, to allow them to record gains. Here are the facts: Original cost Accumulated depreciation Fair value...
--/1 Question 1 View Policies Current Attempt in Progress Culver Company purchased equipment on January 2, 2016, for $113,000. The equipment had an estimated useful life of 5 years with an estimated salvage value of $11,600. Culver uses straight-line depreciation on all assets. On January 2, 2020, Culver exchanged this equipment plus $12,500 in cash for newer equipment. The old equipment has a fair value of $47,600. Prepare the journal entry to record the exchange on the books of Culver...
Exercise 10-19 Indigo Company exchanged equipment used in its manufacturing operations plus $4,260 in cash for similar equipment used in the operations of Sweet Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Indigo Co $39,760 26,980 17,750 4,260 Sweet Co. $39,760 14,200 22,010 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically...
Oriole Company exchanged equipment used in its manufacturing operations plus $3,300 in cash for similar equipment used in the operations of Waterway Company. The following information pertains to the exchange. Oriole Waterway Co. Co. $30,800 $30,800 Equipment (cost) 20,900 11,000 Accumulated depreciation Fair value of equipment 17,050 13,750 Cash given up 3,300 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when...
Question 13 --/1 View Policies Current Attempt in Progress Flint Incorporated factored $156,000 of accounts receivable with Buffalo Factors Inc. on a without-recourse basis. Buffalo assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Flint Incorporated and Buffalo Factors to record the factoring of the accounts receivable to Buffalo. (if no entry is required, select "No Entry" for the account...
Exercise 10-19 Sheffield Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for similar equipment used in the operations of Tamarisk Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Sheffield Co. $33,600 22,800 15,000 3,600 Tamarisk Co. $33,600 12,000 18,600 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically...
Exercise 10-19 Oriole Company exchanged equipment used in its manufacturing operations plus $3,480 in cash for similar equipment used in the operations of Waterway Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Oriole Co. $32,480 22,040 14,500 3,480 Waterway Co. $32,480 11,600 17,980 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically...
Kingbird Company exchanged equipment used in its manufacturing operations plus $4,140 in cash for similar equipment used in the operations of Oriole Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Kingbird Co $38,640 26,220 17,250 4,140 Oriole Co. $38,640 13,800 21,390 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when...
Question 12 0.83/1 View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. Sweet Corporation traded a used truck (cost $26,400, accumulated depreciation $23,760) for a small computer with a fair value of $4.356. Sweet also paid $660 in the transaction. Prepare the journal entry to record the exchange, assuming the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No...
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