1. CBA Company needs to capitalize on interest costs during construction, Actual interest incurred is $20,000....
1. CBA Company needs to capitalize on interest costs during construction, Actual interest incurred is $20,000. Avoidable interest is $25,000. How much should CBA company capitalize?
a. $5,000 b. $20,000 c. $25,000 d. $45,000
2. Transaction 1 has commercial substance. XYZ Company exchanges one asset for another asset and there is a $4,000 loss. Transaction 2 lacks commercial substance. XYZ Company exchanges one asset for another asset and there is a $5,000 gain. At the time of exchange, Transaction 1 should have a(an) ________ and Transaction 2 should have a(an) __________.
a. immediate recognized loss, immediately recognized gain
b. immediately recognized loss, deferred gain
c. deferred loss, immediately recognized gain
d. deferred loss, deferred gain
Homework Answers
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1. CBA Company needs to capitalize on interest costs during
construction, Actual interest incurred is $20,000....
1. CBA Company needs to capitalize on interest costs during construction, Actual interest incurre...
1. CBA Company needs to capitalize on interest costs during construction, Actual interest incurred is $20,000. Avoidable interest is $25,000. How much should CBA company capitalize? a. $5,000 b. $20,000 c. $25,000 d. $45,000 2. Transaction 1 has commercial substance. XYZ Company exchanges one asset for another asset and there is a $4,000 loss. Transaction 2 lacks commercial substance. XYZ Company exchanges one asset for another asset and there is a $5,000 gain. At the time of exchange, Transaction 1...
1.Below is the information relative to an exchange of assets by Stanton Company. The exchange lacks...
1.Below is the information relative to an exchange of assets by Stanton Company. The exchange lacks commercial substance. Old Equipment Book Value Fair Value Cash Paid to the Other Company Case I $225,000 $245,000 $45,000 Case II $150,000 $135,000 $21,000 For each of the two cases, answer the following questions: How much should the company record for the new equipment? How much gain or loss should the firm recognize? Indicate whether it is a gain or loss. If no gain...
1. On October 1, 20X1, a company purchased a piece of land by agreeing to pay...
1. On October 1, 20X1, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had borrowed the money from a bank to pay the seller immediately, management estimates the bank would have required interest of 9%. For what amount should the company record the land on the date of purchase (rounded to the nearest dollar)? Multiple Choice $450,000. $412,844. $378,756. $369,000. 2. Wolf Computer exchanged a machine with a...
3. On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,300,000. During 2018, costs of $2,100,000 were incurred...
3.
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,300,000. During 2018, costs of $2,100,000 were incurred with estimated costs of $4,100,000 yet to be incurred. Billings of $2,600,000 were sent, and cash collected was $2,350,000. In 2019, costs incurred were $2,600,000 with remaining costs estimated to be $3,750,000. 2019 billings were $2,850,000 and $2,575,000 cash was collected. The project was completed in 2020 after additional costs...
Part 1: Non-Monetary Exchange On January 1, 2020, the Felix Company purchased a machine to use...
Part 1: Non-Monetary Exchange On January 1, 2020, the Felix Company purchased a machine to use in the manufacture of its product. The invoice cost of the machine was $260,000; at the time of acquisition, the machine had an original estimated useful life of 10 years and an estimated salvage value of $20,000. The machine was depreciated using the straight-line method. On August 1, 2025, Felix exchanged the old machine for a newer model. The new machine had a fair...
Prime Company holds 80 percent of Suspect Company’s stock, acquired on January 1, 20X2, for $160,000....
Prime Company holds 80 percent of Suspect Company’s stock, acquired on January 1, 20X2, for $160,000. On the acquisition date, the fair value of the noncontrolling interest was $40,000. Suspect reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect. Trial balance data for the two companies on December 31, 20X6, are as follows: Prime Company Suspect Company Item Debit Credit Debit Credit Cash...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the bu...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the business. As such, Ben and Allie agree that immediately after the incorporation of the company and the issuance of stock, Ben will sell Allie half of his shares in the company. Ben contributes inventory (FMV $60,000, Basis $30,000), and accounts receivable (FMV $40,000, Basis $40,000) to the corporation for 50% of the stock, and Jerry contributes equipment (FMV $60,000, Basis...
Booster Company is preparing its financial statements for the year ended June 30, 2018. The financial...
Booster Company is preparing its financial statements for the
year ended June 30, 2018. The financial statements are complete
except for the statement of cash flows. You have been asked to
prepare a statement of cash flows for the year ended June 30,
2017.
Download the Excel spreadsheet Booster Company A1.
Required:
Prepare a spreadsheet to support a statement of cash flows for
the year ended June 30, 2018.
In the Excel Worksheet column named ‘Worksheet
Entries’, show under Debit...
- Complete the specific consolidation entries related to the Additional Information items #2 and ...
- Complete the specific consolidation entries related to the
Additional Information items #2 and #3 ONLY. One is a land
transfer, and the other is a depreciable asset transfer. (not the
whole consolidation)
Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 20X2, for $160,000. On the acquisition date, the fair value of the noncontrolling interest was $40,000. Suspect reported retained earnings of S50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted...
Booster Company is preparing its financial statements for the year ended June 30, 2018. The financial...
Booster Company is preparing its financial statements for the
year ended June 30, 2018. The financial statements are complete
except for the statement of cash flows. You have been asked to
prepare a statement of cash flows for the year ended June 30,
2017.
Booster Company A1 Company Facts:
PLEASE FILL IN THE BELOW CHARTS FOR THE
ASSIGNMENT:------------------------------------------------------------------
Account Balances June 30, 2017 June 30, 2018 Debits $ $ L 361,700 100,000 11,700 1,500 168,750 45.000 Cash Accounts Receivable Marketable...
3.
On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,300,000. During 2018, costs of $2,100,000 were incurred with estimated costs of $4,100,000 yet to be incurred. Billings of $2,600,000 were sent, and cash collected was $2,350,000. In 2019, costs incurred were $2,600,000 with remaining costs estimated to be $3,750,000. 2019 billings were $2,850,000 and $2,575,000 cash was collected. The project was completed in 2020 after additional costs...
Part 1: Non-Monetary Exchange On January 1, 2020, the Felix Company purchased a machine to use in the manufacture of its product. The invoice cost of the machine was $260,000; at the time of acquisition, the machine had an original estimated useful life of 10 years and an estimated salvage value of $20,000. The machine was depreciated using the straight-line method. On August 1, 2025, Felix exchanged the old machine for a newer model. The new machine had a fair...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the business. As such, Ben and Allie agree that immediately after the incorporation of the company and the issuance of stock, Ben will sell Allie half of his shares in the company. Ben contributes inventory (FMV $60,000, Basis $30,000), and accounts receivable (FMV $40,000, Basis $40,000) to the corporation for 50% of the stock, and Jerry contributes equipment (FMV $60,000, Basis...
Booster Company is preparing its financial statements for the
year ended June 30, 2018. The financial statements are complete
except for the statement of cash flows. You have been asked to
prepare a statement of cash flows for the year ended June 30,
2017.
Download the Excel spreadsheet Booster Company A1.
Required:
Prepare a spreadsheet to support a statement of cash flows for
the year ended June 30, 2018.
In the Excel Worksheet column named ‘Worksheet
Entries’, show under Debit...
- Complete the specific consolidation entries related to the
Additional Information items #2 and #3 ONLY. One is a land
transfer, and the other is a depreciable asset transfer. (not the
whole consolidation)
Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 20X2, for $160,000. On the acquisition date, the fair value of the noncontrolling interest was $40,000. Suspect reported retained earnings of S50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted...
Booster Company is preparing its financial statements for the
year ended June 30, 2018. The financial statements are complete
except for the statement of cash flows. You have been asked to
prepare a statement of cash flows for the year ended June 30,
2017.
Booster Company A1 Company Facts:
PLEASE FILL IN THE BELOW CHARTS FOR THE
ASSIGNMENT:------------------------------------------------------------------
Account Balances June 30, 2017 June 30, 2018 Debits $ $ L 361,700 100,000 11,700 1,500 168,750 45.000 Cash Accounts Receivable Marketable...
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