Question

Due to an office redesign in the Ontario building, FFI traded some old equipment for different...

Due to an office redesign in the Ontario building, FFI traded some old equipment for different equipment with a similar life and value in use. The fair value of the equipment disposed of was $5,000. The cost of this equipment was $7,000, and the accumulated depreciation on the equipment at December 31, 2019, was $3,000. This transaction was not recorded in the books of account. No entry was made to record the exchange. FFI uses ASPE.

Required: Determine the impact on the company’s assets, liabilities, and net income of measuring the transaction with the carrying value versus the fair value.  

Instruction: Write increase, decrease, or no impact in each box.

Carrying

Value

Fair

Value

Assets

Liabilities

Net income

0 0
Add a comment Improve this question Transcribed image text
Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
Due to an office redesign in the Ontario building, FFI traded some old equipment for different...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • Cedric Company recently traded in an older model of equipment for a new model. The old...

    Cedric Company recently traded in an older model of equipment for a new model. The old model's book value was $191,000 (original cost of $421,000 less $230,000 in accumulated depreciation) and its fair value of the old equipment is $180,000. Cedric paid $61,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction...

  • Cedric Company recently traded in an older model of equipment for a new model. The old...

    Cedric Company recently traded in an older model of equipment for a new model. The old model's book value was $270,000 (original cost of $590,000 less $320,000 in accumulated depreciation) and its fair value was $300,000. Cedric paid $70,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet...

  • Cedric Company recently traded in an older model of equipment for a new model. The old...

    Cedric Company recently traded in an older model of equipment for a new model. The old model's book value was $198,000 (original cost of $438,000 less $240,000 in accumulated depreciation) and its fair value was $220,000. Cedric paid $62,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet...

  • 1. When a company’s stock is actively traded on a major exchange is traded for equipment:...

    1. When a company’s stock is actively traded on a major exchange is traded for equipment: A. No entry is recorded because no cash was exchanged. B. An asset is recorded for the fair value of the stock. C. An asset is recorded for the appraised value of the equipment. D. Paid-in capital is increased by the appraised value of the equipment. 2. Paid-in capital in excess of par is reported as: A. A reduction of shareholders’ equity. B. A...

  • Use the following facts for Multiple Choice problems 17 and 18 (each question is independent of...

    Use the following facts for Multiple Choice problems 17 and 18 (each question is independent of the other): The following financial statement information is for an investor company and an investee company on January 1, 2016. On January 1, 2016, the investor company’s common stock had a traded market value of $22 per share, and the investee company’s common stock had a traded market value of $18 per share. Book Values Fair Values Investor Investee Investor Investee Receivables & inventories...

  • Trask Corporation, a public company whose shares are traded in the over-the-counter market, had the following...

    Trask Corporation, a public company whose shares are traded in the over-the-counter market, had the following shareholders’ equity account balances at December 31, 2016: Common stock $ 7,875,000 Additional paid-in capital (including stock options) 16,050,000 Retained earnings 16,445,000 Treasury common stock 750,000 Transactions during 2017 and other information relating to the shareholders’ equity accounts follow: As of January 1, 2017, Trask had 4,000,000 authorized shares of $5 par-value common stock; it had issued 1,575,000 shares of which 75,000 were held...

  • Please explain how each answer was received. Thank you! 2x EC-23 (similar to) Question Help Jetson...

    Please explain how each answer was received. Thank you! 2x EC-23 (similar to) Question Help Jetson Exercise Equipment, Inc. reported the following financial statements for 2018: E: (Click the icon to view the income statement.) : (Click the icon to view the comparative balance sheet.) Read the requirements. Requirement 1. Compute the amount of Jetson Exercise's acquisition of plant assets. Jetson Exercise disposed of plant assets at book value. The cost and accumulated depreciation of the disposed asset was $49,200....

  • ripleft Resubmit Question 4 Homework Answered O Fairfax Company bought a piece of equipment on December...

    ripleft Resubmit Question 4 Homework Answered O Fairfax Company bought a piece of equipment on December 1, 2025 for $12,000. Fairfax expects the equipment to last four years and then be worthless. What is the depreciation expense and net carrying value Fairfax would show on its annual financial statements at December 31, 2026 for this asset? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. x Depreciation expense $3,250; net carrying value...

  • The cash flow statement reports the cash purchases for property, plant and equipment. How much did...

    The cash flow statement reports the cash purchases for property, plant and equipment. How much did the company purchase and sell? Property, Plant and Equipment Property, plant and equipment, which includes assets under capital leases, are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases. Depreciation is computed using the straight-line method over estimated useful lives of the assets, generally ranging from...

  • Blue Spruce Corporation, a clothing retailer, had income from operations (before tax) of $307,500, and recorded...

    Blue Spruce Corporation, a clothing retailer, had income from operations (before tax) of $307,500, and recorded the following before-tax gains/(losses) for the year ended December 31, 2020: Gain on disposal of equipment Unrealized (loss)/gain on FV-NI investments (Loss)/gain on disposal of building Gain on disposal of FV-Nl investments 22,140 (44,280) (55,760) 27,060 Blue Spruce also had the following account balances as at January 1, 2020: Retained earnings Accumulated other comprehensive income (this was due to a revaluation surplus on land)...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT