Question 20 - A printer that cost $600 and has been owned for 2 years is traded in for a new one. Depreciation in the amount of $120 had been taken each year. The new printer has a fair market value of $1,250. A trade-in allowance of $400 is granted, and the balance is paid in cash. The transaction to enter the exchanges of these two assets would result in the recognition of a gain of $40. a loss of $40. a gain of $200. neither a gain nor a loss.
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Question 20 - A printer that cost $600 and has been owned for 2 years is traded in for a new one.
a gain of $40. |
|
a loss of $40. |
|
a gain of $200. |
|
neither a gain nor a loss. |
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Solved in 2 steps
- Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment was made on January 1, 2021. The prevailing rate of interest for this type of note is 12%. 29. How much is the carying amount of the note on initial recognition? 30. How much is the interest income for 2021? 31. How much is the carrying amount of the note on January 1, 2022? Problem 11: Use the following information for the next three questions: On January 1, 2021, FORCEFUL Co. sold machinery with historical cost of P8,000,000 and accumulated depreciation of P4,400,000 in exchange for a 3-year, P4,800,000 noninterest-bearing note receivable due in equal semi-annual payments starting July 1, 2021.…8.8 A new drill press was purchased for $95,000 by trading in a similar machine that had a book value of $25,000. Assuming that the trade-in allowance is $20,000 and that $75,000 cash is to be paid for the new asset, what is the cost basis of the new asset for book depreciation purposes?28 Assume that Abdul Baari LLC acquiring a new truck for OMR 45000. In exchange, the company pays OMR 32000 cash and old truck. The old truck originally cost OMR 40000 and has accumulated depreciation of OMR 25,000, which implies a OMR 15,000 book value at the time of exchange. From the following given options identify the correct journal entry for profit or loss on exchange of old truck with new truck. a. Dr New Truck A/c OMR 45000 Dr Loss on exchange of truck OMR 2000 Dr Accumulated depreciation on old Truck OMR 25000 and Cr cash A/c 32000 Cr Old Truck A/C OMR 40000 b. Dr New Truck A/C OMR 47000 and Cr Cash A/c 32000 Cr Old truck A/c 15000 c. Dr New Truck A/C OMR 45000 Dr Loss on exchange of old Truck OMR 2000 and cash A/c 32000 Cr old Truck A/c OMR 15000 d. None of the given options Clear my choice
- On the first day of the fiscal year, a new walk-in cooler with a list price of $51,300 was acquired in exchange for an old cooler and $40,600 cash. The old cooler had a cost of $44,000 and accumulated depreciation of $37,500. Assume the transaction has commercial substance. a. Determine the gain to be recorded on the exchange.$fill in the blank 4a5f8d00f04b05f_1 b. Journalize the entry to record the exchange. If an amount box does not require an entry, leave it blank. Equipment (new) fill in the blank b9746ffc1fed022_2 fill in the blank b9746ffc1fed022_3 Accumulated Depreciation fill in the blank b9746ffc1fed022_5 fill in the blank b9746ffc1fed022_6 Equipment fill in the blank b9746ffc1fed022_8 fill in the blank b9746ffc1fed022_9 Gain on Exchange of Equipment fill in the blank b9746ffc1fed022_11 fill in the blank b9746ffc1fed022_12 Cash fill in the blank b9746ffc1fed022_14 fill in the blank b9746ffc1fed022_151. Entity A, a government entity, acquires a machine for $10,000 on November 1, 20x1, on account, and settles the account on January 3, 20x2. The machine is estimated to have a useful life of 5 years and a residual value of 5% of cost. Entity A uses the straight line method of depreciation. The exchange rates are as follows. November 1, 20x1 $1 P50 December 31 20x1 $1 P40 January 3 20x2 $1P45 How much is the net foreign exchange gain (loss) recognized in surplus or deficit from the transaction?| a. P10.000 C. (P5 000) b. (P10,000) d. P500028 Assume that Abdul Baari LLC acquiring a new truck for OMR 45000. In exchange, the company pays OMR 32000 cash and old truck. The old truck originally cost OMR 40000 and has accumulated depreciation of OMR 25,000, which implies a OMR 15,000 book value at the time of exchange. From the following given options identify the correct journal entry for profit or loss on exchange of old truck with new truck. a. Dr New Truck A/c OMR 45000 Dr Loss on exchange of truck OMR 2000 Dr Accumulated depreciation on old Truck OMR 25000 and Cr cash A/c 32000 Cr Old Truck A/C OMR 40000 b. Dr New Truck A/C OMR 47000 and Cr Cash A/c 32000 Cr Old truck A/c 15000 c. Dr New Truck A/C OMR 45000 Dr Loss on exchange of old Truck OMR 2000 and cash A/c 32000 Cr old Truck A/c OMR 15000 d. None of the given options
- 32 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 was $180,000. Cedric paid $61,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No 1 Transaction 1 Equipment - new Accumulated depreciation X Answer is not complete. General Journal Gain on exchange of assets Cash Equipment - old 33 X Debit 241,000 230,000 Credit 11,000 X 61,000 421,000An asset that cost $20,000 and on which depreciation of $15,000 has been recorded is traded in on a new replacement asset. The sales price, also the fair value, of the new asset is $27,000. The owner of the old asset was given an allowance of $7,000 for the old asset and paid $20,000 in cash. For financial accounting purposes, what is the amount of gain or loss recorded? Question 5 options: a. a gain of $2,000 b. no gain or loss c. a loss of $2,000 d. a gain of $7,000Problem 26-15 (IAA) During the current year, Sacrosanct Company purchased a second-hand machine at a price of P3,200,000. A cash payment of P500,000 was made and a two-year, noninterest bearing note was issued for the balance. Recent transactions involving similar machinery indicate that the used machine has a fair value of P2,400,000. A new machine would cost P4,000,000. The following costs were incurred during the year: Cost of removing old machine that is replaced Cash proceeds from sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdowns Cost of installation Cost of testing machine prior to use Cost of hauling machine from vendor to entity premises Cost of repairing damage to machine caused when machine was dropped during installation 30,000 Repairs incurred during first year of operations Safety device added to the machine Cost of training workers to operate the machine 30,000 10,000 150,000 200,000…
- Problem 26-15 (IAA) During the current year, Sacrosanct Company purchased a second-hand machine at a price of P3,200,000. A cash payment of P500,000 was made and a two-year, noninterest bearing note was issued for the balance. Recent transactions involving similar machinery indicate that the used machine has a fair value of P2,400,000. A new machine would cost P4,000,000. The following costs were incurred during the year: 30,000 Cost of removing old machine that is replaced Cash proceeds from sale of the old machine replaced General overhaul and repairs to recondition machine prior to use Cost of spare parts to cover breakdowns Cost of installation Cost of testing machine prior to use Cost of hauling machine from vendor to entity premises Cost of repairing damage to machine caused when machine was dropped during installation 30,000 Repairs incurred during first year of operations Safety device added to the machine Cost of training workers to operate the machine 10,000 150,000 200,000…Problem 9: Use the following information for the next five questions: On January 1, 2021, PITIFUL Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, PITIFUL Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments starting December 31, 2021. The prevailing rate of interest of this type of note is 12%. 24. How much is the carrying amount of the note on initial recognition? 25. How much is the interest income for 2021? 26. How much is the carrying amount of the note on December 31, 2021? 27. How much is the current portion of the note on December 31, 2021? 28. How much is the noncurrent portion of the note on December 31, 2021? IPROBLEM 1 On August 1, Barreto Company exchanged a machine for a similar machine owned by Blakey Company and also paid $7,000 cash to Blakey Company. Barreto's machine cost $85,000 when originally purchased and has accumulated depreciation to date of $25,000 and a fair market value of $55,000. Blakey's machine originally cost $96,000 and has accumulated depreciation to date of $42,000 and a fair value of $62,000. Prepare the necessary journal entries for Barreto Company and Blakey Company to record this transaction assuming commercial substance.