Johnson Co. trades in a machine with a book value of $10,000 for a new machine with a list value of $12,000. In addition to the old machine, Johnson also pays $5,000 cash. The gain or loss on this exchange (which has commercial substance) would be how much? Multiple choice question. $2,000 loss $2,000 gain $3,000 loss $3,000 gain
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- Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a very similar machine. In addition, Wolf paid $6,000 as part of the exchange. Wolf should recognize: Multiple Choice ● A gain of $11,000. A loss of $1,000. A gain of $5,000. No gain or loss.Parr Company traded in a used delivery truck with a carrying amount of P54,000 for a new delivery truck having a list price of P160,000 and paid a cash difference to the dealer of P75,000. The used truck has a fair value of P60,000 on the date of the exchange. At what amount should the new truck be recorded on Parr's books? O P135,000 O P160,000 O P129.000 O P106.000A firm trades in an old truck with a fair value of $25,000 and a carrying value of $20,000 for new truck that has a list price of $29,000. To complete the transaction, the firm gives the dealer $1,000 cash. At what value will the firm record the new truck? A. $29,000 B. $1,000 C. $26,000 D. $25,000
- XYZ Services sells (without recourse) $100,000 of receivables to a bank on 2/1/20. The bank retains 3% of the receivables and they charge a fee equal to 2% of the receivables. What effect (if any) does the sale on 2/1/20 have on the assets, liabilities, and equity of the bank that purchases the receivablesCaleb Co. owns a machine that had cost $42,400 with accumulated depreciation of $18,400. Caleb exchanges the machine for a newer model that has a market value of $52,000. 1. Record the exchange assuming Caleb paid $30,000 cash and the exchange has commercial substance. 2. Record the exchange assuming Caleb paid $22,000 cash and the exchange has commercial substance.Caine Company exchanged a car from inventory for a computer to be used as a long-term asset. The following information relates to this exchange: Carrying amount of the car, 600,000List selling price of the car, 900,000’ Fair value of the computer, 860,000’; Cash difference paid by Caine, 100,000. What is the cost of the computer acquired in exchange? 1. Indicate the appropriate entries requires for each of the transactions. 2. Will Caine company declare a gain or loss on this transaction?
- Ray Company traded in an old machine having a carrying amount of P16,800 and paid a cash difference of P6,000 for a new machine having a total cash price of P20,500. What amount of loss should Ray recognized on this exchange?Bonnie Corp. sells a machine to a customer for $18,000 and uses the Installment Sales Method to account for the sale. The cost of the goods was $12,400. At the date of sale, Bonnie delivers the machine and receives $4,500, with the remainder being an installment account receivable for $13,500. How much gross profit should Bonnie recognize at the date of delivery? Do not use commas, dollar symbols (e.g. $), units or spaces in your answers. For example, one thousand five hundred and twenty-three dollars should be entered as 1523. If the Canvas system inserts a comma for you, don't worry about it.Use the following information for the next two questions:Rooster Co. uses the installment sales method. Relevant information follows: 20x1 20x2 Sales 300,000 480,000 Cost of sales 240,000 336,000 Installment receivable- 20x1 180,000 60,000 Installment receivable- 20x2 360,000 Rooster Co. repossessed a property that was sold in 20x1 for ₱50,000. Total collections from this sale were ₱24,000. Rooster Co. expects to resell the property for ₱30,000 after reconditioning costs of ₱4,000. The normal profit margin on resale of repossessed property is 30%.a.) How much is the gain or loss on repossession?b.) How much is the total realized gross profit in 20x2?
- Company D decides to factor $600,000 of its accounts receivables with recourse. The factoring company charges 4% to cover its expenses and risks. The factoring company also retains 9% of the accounts receivable for possible returns. Company D estimates the fair value of the recourse liability to be $25,000. How much cash does Company D receive as a result of selling its accounts receivable? A. $540,000 B. $600,000 C. $575,000 D. $522,000Ned received $300,000 from customers as deposits on returnable containers during 2021. Fifteen percent of the containers were not returned. The deposits are based on the container cost marked up 20%. How much profit did Ned realize on the forfeited deposits? A. $0. B. $7,500. C. $9,000. D. $45,000Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a very similar machine. In addition, Wolf paid $6,000 as part of the exchange. Wolf should recognize and gain or loss of what amount?