5. Tom Inc. and Jerry Co. made an exchange with no commercial substance. The asset given...
5. Tom Inc. and Jerry Co. made an exchange with no commercial substance.
The asset given up by Tom Inc. had a book value of $12,000 and a fair value of $15,000.
The asset given up by Jerry Co. had a book value of $20,000 and a fair value of $19,000.
Cash of $4,000 was received by Jerry Co.
Tom Inc. recorded the asset received at $ Answer on its books and Jerry Co. recorded the asset received at $ Answer its books.
- Grove Co. purchased machinery on September 19, 2015, for $190,000. Residual value was estimated to be $10,000. The machinery will be depreciated over eight years using the sum-of-the-years'-digits method. Depreciation is computed on the basis of the nearest full month, and its financial year ends December 31. Grove should record depreciation expense for 2016 on this machinery of $
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5. Tom Inc. and Jerry Co. made an exchange with no commercial
substance.
The asset given...
Mags Corporation purchased a patent for $540,000 on September 1, 2014. It had a useful life...
Mags Corporation purchased a patent for $540,000 on September 1, 2014. It had a useful life of 10 years. On January 1, 2016, Mags spent $132,000 to successfully defend the patent in a lawsuit. Mags feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2016? $ Tom Inc. and Jerry Co. made an exchange with no commercial substance. The asset given up by Tom Inc. had...
Grove Co. purchased machinery on September 19, 2015, for $190,000. Residual value was estimated to be...
Grove Co. purchased machinery on September 19, 2015, for $190,000. Residual value was estimated to be $10,000. The machinery will be depreciated over eight years using the sum-of-the-years'-digits method. Depreciation is computed on the basis of the nearest full month, and its financial year ends December 31. Grove should record depreciation expense for 2016 on this machinery of $
Reporting an Asset Exchange Clarksten Co. and Kay Inc. exchange equipment. Information related to this exchange...
Reporting an Asset Exchange Clarksten Co. and Kay Inc. exchange equipment. Information related to this exchange for both companies follows. Clarksten Co. Kay Inc. Equipment given up: Equipment (original cost) $60,000 $70,000 Accumulated depreciation 20,000 24,000 Fair value 36.000 48,000 Cash exchanged 112,000) 12,000 Support Answer the following questions, rounding your answers to the nearest whole number, a. Record the exchange for Clarksten Co. assuming the transaction has commercial substance. b. Record the exchange for Kay Inc. assuming the transaction...
On August 1, Bridgeport, Inc. exchanged productive assets with Indigo, Inc. Bridgeport's asset is referred to...
On August 1, Bridgeport, Inc. exchanged productive assets with Indigo, Inc. Bridgeport's asset is referred to below as "Asset A and Indigo' is referred to as "Asset B." The following facts pertain to these assets. Original cost Accumulated depreciation (to date of exchange) Fair value at date of exchange Cash paid by Bridgeport, Inc. Cash received by Indigo, Inc. Asset A $117,120 48,800 73,200 18,300 Asset B $134,200 57,340 91,500 18,300 Assuming that the exchange of Assets A and B...
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:
What is recognized when cash is involved in an exchange having commercial substance? Comparing the fair...
What is recognized when cash is involved in an exchange having commercial substance? Comparing the fair value of the asset received to the fair value of the asset given up allows computation of a loss or gain. Losses and gains are recognized in their entirety. Only gains are recognized. Only losses are recognized.
On August 1, Ayayai, Inc. exchanged productive assets with Pina, Inc. Ayayai's asset is referred to...
On August 1, Ayayai, Inc. exchanged productive assets with Pina, Inc. Ayayai's asset is referred to below as “Asset A," and Pina' is referred to as “Asset B.” The following facts pertain to these assets. Original cost Accumulated depreciation (to date of exchange) Fair value at date of exchange Cash paid by Ayayai, Inc. Cash received by Pina, Inc. Asset A Asset B $99,840 $114,400 41,600 48,880 62,400 78,000 15,600 15,600 - Your answer is partially correct. nominathotthobenenenotenendoheemminbetonwendthewchef both w...
Assigning Value to Assets in Nonmonetary Exchange with Commercial Substance DD Inc. traded in its old...
Assigning Value to Assets in Nonmonetary Exchange with Commercial Substance DD Inc. traded in its old building (costing $700,000 with accumulated depreciation of $200,000) for a new building with a fair value of $320,000 along with $160,000 cash from the trade. If the transaction has commercial substance, what amount does DD assign to the new building? Amount assigned to new building $ Check
Prepare the journal entries necessary to record the exchange, assuming (a) has commercial substance, and (b)...
Prepare the journal entries necessary to record the exchange,
assuming (a) has commercial substance, and (b) lacks commercial
substance.
*Practice Exercise 10-4 Marin Inc. purchased a commercial grade soft-serve ice cream machine on September 30, 2017. Marin traded in its existing machine and paid cash in the transaction. The details of the transaction are as follows: • List price of new freezer • Cash paid • Cost of old machine (4-year life, $1,170 salvage value) • Accumulated depreciation-old machine (straight-line)...
Evan and Tony companies exchanged machinery with the following: &nbs
Evan and Tony companies exchanged machinery with the following: Evan’s Machine Tony’s Machine Fair value $1,395,000 $1,455,000 Recorded cost 2,700,000 3,240,000 Accumulated depreciation 1,350,000 1,782,000 Cash paid 60,000 Cash received 60,000 Instructions (a) Prepare the entriy(ies) on Tony’s books assuming that the exchange lacked commercial substance. (b) Prepare the entry(ies) on Evan’s books assuming that the exchange had commercial substance.
Reporting an Asset Exchange Clarksten Co. and Kay Inc. exchange equipment. Information related to this exchange for both companies follows. Clarksten Co. Kay Inc. Equipment given up: Equipment (original cost) $60,000 $70,000 Accumulated depreciation 20,000 24,000 Fair value 36.000 48,000 Cash exchanged 112,000) 12,000 Support Answer the following questions, rounding your answers to the nearest whole number, a. Record the exchange for Clarksten Co. assuming the transaction has commercial substance. b. Record the exchange for Kay Inc. assuming the transaction...
On August 1, Bridgeport, Inc. exchanged productive assets with Indigo, Inc. Bridgeport's asset is referred to below as "Asset A and Indigo' is referred to as "Asset B." The following facts pertain to these assets. Original cost Accumulated depreciation (to date of exchange) Fair value at date of exchange Cash paid by Bridgeport, Inc. Cash received by Indigo, Inc. Asset A $117,120 48,800 73,200 18,300 Asset B $134,200 57,340 91,500 18,300 Assuming that the exchange of Assets A and B...
On August 1, Ayayai, Inc. exchanged productive assets with Pina, Inc. Ayayai's asset is referred to below as “Asset A," and Pina' is referred to as “Asset B.” The following facts pertain to these assets. Original cost Accumulated depreciation (to date of exchange) Fair value at date of exchange Cash paid by Ayayai, Inc. Cash received by Pina, Inc. Asset A Asset B $99,840 $114,400 41,600 48,880 62,400 78,000 15,600 15,600 - Your answer is partially correct. nominathotthobenenenotenendoheemminbetonwendthewchef both w...
Assigning Value to Assets in Nonmonetary Exchange with Commercial Substance DD Inc. traded in its old building (costing $700,000 with accumulated depreciation of $200,000) for a new building with a fair value of $320,000 along with $160,000 cash from the trade. If the transaction has commercial substance, what amount does DD assign to the new building? Amount assigned to new building $ Check
Prepare the journal entries necessary to record the exchange,
assuming (a) has commercial substance, and (b) lacks commercial
substance.
*Practice Exercise 10-4 Marin Inc. purchased a commercial grade soft-serve ice cream machine on September 30, 2017. Marin traded in its existing machine and paid cash in the transaction. The details of the transaction are as follows: • List price of new freezer • Cash paid • Cost of old machine (4-year life, $1,170 salvage value) • Accumulated depreciation-old machine (straight-line)...
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