Hinrich Company traded machinery with original cost of $145,000 and accumulated depreciation of $25,000. It received...
Hinrich Company traded machinery with original cost of $145,000 and accumulated depreciation of $25,000. It received in exchange from Noach Company a machine with a fair value of $180,000 and cash of $20,000. Hinrich expects its future cash flows not to change as a result of this transaction. Noach’s machine has a book value of $190,000. What amount of gain or loss should Hinrich recognize on the exchange? a. $ -0- *b. $8,000 gain c. $20,000 loss d. $80,000 gain Please explain why the answer is B; the other answer on this site has incorrect work
Homework Answers
Here answer is d $80000 Gain
which is calculated and explained as below
Book value of Machinery given up = Cost - Accumulated Depreciation
= $145000-$25000
= $120000
What HInirich Received in Exchange = Cash+Fair Value of Machine from Noach
= $20000+$180000
= $200000
So Gain on Exchange is = $200000(received)-$120000(given)
= $80000
Journal Entry for this will be
Debit Credit
Cash $20000
Machine(New) $180000
Accumulated Depreciation(old) $25000
Machine(old) $145000
Gain $80000
(Exchange of Machine for new machine and cash)
Add Answer to:
Hinrich Company traded machinery with original cost of $145,000
and accumulated depreciation of $25,000. It received...
Timmons Company traded machinery with a book value of $240,000 and a fair value of $400,000....
Timmons Company traded machinery with a book value of $240,000 and a fair value of $400,000. It received in exchange from Lewis Company a machine with a fair value of $360,000 and cash of $40,000. Lewis’s machine has a book value of $380,000. What amount of gain should Timmons recognize on the exchange? Question 11 options: $ -0- $16,000 $40,000 $160,000
Pharoah Company traded machinery with a book value of $480,000 and a fair value of $1,070,000....
Pharoah Company traded machinery with a book value of $480,000 and a fair value of $1,070,000. It received in exchange from Waterway Industries a machine with a fair value of $963,000 and cash of $107,000. Waterway’s machine has a book value of $1,016,500. What amount of gain should Pharoah recognize on the exchange (assuming lack of commercial substance)? **Please show all work** The correct answer is $59,000 but not sure how to get it.
Cullumber Company traded machinery with a book value of $595000 and a fair value of $955000....
Cullumber Company traded machinery with a book value of $595000
and a fair value of $955000. It received in exchange from Swifty
Corporation a machine with a fair value of $859500 and cash of
$95500. Swifty’s machine has a book value of $907250. What amount
of gain should Cullumber recognize on the exchange (assuming lack
of commercial substance)?
$95500
$360000
$ -0-
$36000
Dansen Co. owns a machine that has an original cost of S120,000, annual straight-line depreciation of...
Dansen Co. owns a machine that has an original cost of S120,000, annual straight-line depreciation of S20,000, and it has accumulated depreciation of S60,000 on December 31, 2016. On March 31. 2017, when the machine has a market value of S57,500, the company exchanged it for a new machine with a fair value of S135,000 and paid S77,500 cash in the exchange. The exchange lacked commercial substance. The gain or loss to be recorded on the exchange is a. SO....
Accounting (a) Peppers Corporation owns machinery with a book value of $190,000. It is estimated that...
Accounting (a) Peppers Corporation owns machinery with a book value of $190,000. It is estimated that the machinery will generate future cash flows of $180,000. The machinery has a fair value of $140,000. Record Peppers’ journal entry to recognize any loss that needs to be recognized for impairment. (b) Dillman Corporation owns machinery with a book value of $190,000. It is estimated that the machinery will generate future cash flows of $195,000. The machinery has a fair value of $150,000....
Sample Non-monetary Exchange Questions 2. Loss Bright Company exchanges a used truck (Cost $20,000; Accumulated Depreciation...
Sample Non-monetary Exchange Questions 2. Loss Bright Company exchanges a used truck (Cost $20,000; Accumulated Depreciation $2,000) for a new truck. The fair value of the used truck has been determined at $15,000 and Bright also pays $2,000 cash. Prepare the journal entry to record the exchange for Bright Company Gain Bright Company exchanges a used truck (Cost $30,000; Accumulated Depreciation $28,000) for a new truck. The fair value of the used truck has been determined at $10,000 and Bright...
If a business sells for $8,000 equipment that cost $25,000 and has $20,000 of accumulated depreciation,...
If a business sells for $8,000 equipment that cost $25,000 and has $20,000 of accumulated depreciation, how is this reported in the statement of cash flows? Multiple Choice $8,000 cash inflow in financing activities, and $3,000 loss as an addition to net income under operating activities $8,000 cash inflow in financing activities, $3,000 gain as an addition from net income under operating activities $8,000 inflow as an investing activity, and $3,000 gain as a subtraction from net income under operating...
If a business sells for $8.000 equipment that cost $25,000 and has $20,000 of accumulated depreciation,...
If a business sells for $8.000 equipment that cost $25,000 and has $20,000 of accumulated depreciation, how is this reported in the statement of cash flows? Multiple Choice $8,000 inflow as an investing activity, and $3,000 gain as a subtraction from net income under operating activities $8,000 cash inflow in financing activities, and $3,000 loss as an addition to net income under operating activities $8,000 cash inflow as an investing activity only 58.000 cash inflow in financing activities, $3,000 gain...
Sarasota Company traded a used welding machine (cost $10,260, accumulated depreciation $3,420) for office equipment with...
Sarasota Company traded a used welding machine (cost $10,260, accumulated depreciation $3,420) for office equipment with an estimated fair value of $5,700. Sarasota also paid $3,420 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit...
Riverbed Company traded a used welding machine (cost $9,540, accumulated depreciation $3,180) for office equipment with...
Riverbed Company traded a used welding machine (cost $9,540, accumulated depreciation $3,180) for office equipment with an estimated fair value of $5,300. Riverbed also paid $3,180 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit...
Cullumber Company traded machinery with a book value of $595000
and a fair value of $955000. It received in exchange from Swifty
Corporation a machine with a fair value of $859500 and cash of
$95500. Swifty’s machine has a book value of $907250. What amount
of gain should Cullumber recognize on the exchange (assuming lack
of commercial substance)?
$95500
$360000
$ -0-
$36000
Dansen Co. owns a machine that has an original cost of S120,000, annual straight-line depreciation of S20,000, and it has accumulated depreciation of S60,000 on December 31, 2016. On March 31. 2017, when the machine has a market value of S57,500, the company exchanged it for a new machine with a fair value of S135,000 and paid S77,500 cash in the exchange. The exchange lacked commercial substance. The gain or loss to be recorded on the exchange is a. SO....
Sample Non-monetary Exchange Questions 2. Loss Bright Company exchanges a used truck (Cost $20,000; Accumulated Depreciation $2,000) for a new truck. The fair value of the used truck has been determined at $15,000 and Bright also pays $2,000 cash. Prepare the journal entry to record the exchange for Bright Company Gain Bright Company exchanges a used truck (Cost $30,000; Accumulated Depreciation $28,000) for a new truck. The fair value of the used truck has been determined at $10,000 and Bright...
If a business sells for $8,000 equipment that cost $25,000 and has $20,000 of accumulated depreciation, how is this reported in the statement of cash flows? Multiple Choice $8,000 cash inflow in financing activities, and $3,000 loss as an addition to net income under operating activities $8,000 cash inflow in financing activities, $3,000 gain as an addition from net income under operating activities $8,000 inflow as an investing activity, and $3,000 gain as a subtraction from net income under operating...
If a business sells for $8.000 equipment that cost $25,000 and has $20,000 of accumulated depreciation, how is this reported in the statement of cash flows? Multiple Choice $8,000 inflow as an investing activity, and $3,000 gain as a subtraction from net income under operating activities $8,000 cash inflow in financing activities, and $3,000 loss as an addition to net income under operating activities $8,000 cash inflow as an investing activity only 58.000 cash inflow in financing activities, $3,000 gain...
Sarasota Company traded a used welding machine (cost $10,260, accumulated depreciation $3,420) for office equipment with an estimated fair value of $5,700. Sarasota also paid $3,420 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit...
Riverbed Company traded a used welding machine (cost $9,540, accumulated depreciation $3,180) for office equipment with an estimated fair value of $5,300. Riverbed also paid $3,180 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit...
Most questions answered within 3 hours.
-
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 2 hours ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 2 hours ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 3 hours ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 4 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 5 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 5 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 6 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 6 hours ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 6 hours ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 6 hours ago -
Project management question:
Name 3 different types of resources (hint: humans are one
type)
asked 7 hours ago -
Consider the following reaction: C 2H 2( g) + 2H 2( g) C 2H 6(
g)...
asked 7 hours ago