The following information relates to an exchange of assets that has commercial substance by Brent Company. Old Equipment Book Value Fair Value Cash Paid Case A $75,000 $85,000 $15,000 Case B $50,000 $45,000 $7,000 For Case B, equipment would be recorded at $Answer and Answer (gain/loss) of $Answer would also be recorded.

The following information relates to an exchange of assets that has commercial substance by Brent Company. Old Equipment Book Value Fair Value Cash Paid Case A $75,000 $85,000 $15,000 Case B $50,000 $45,000 $7,000 For Case B, equipment would be recorded at $Answer and Answer (gain/loss) of $Answer would also be recorded.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Equipment given up: Clark Co. Keys Inc. Accumulated depreciation Equipment (original cost) $54,000 $63,000 18,000 21,600 32,400 43,200 (10,800) 10,800 Fair value Cash exchanged Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance. Exchange has Commercial Substance Exchange Lacks Commercial Substance a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. a. Account Name Dr. Cr.
The following information relates to an exchange of assets by Wharton Company. The exchange lacks commercial substance. Old Equipment Book Value Fair Value Cash Paid Case I $75,000 $85,000 $15,000 Case II $50,000 $45,000 $7,000 For Case I, Wharton records the equipment at $ Answer on its books and reports a gain or (loss) of $ Answer on the exchange.
On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to below as "Asset A," and Wiggins' is referred to as "Asset B." The following facts pertain to these assets.Asset AOriginal Cost $96,000Accumulated Depreciation (to date of exchange) $40,000Fair Value at date of exchange $60,000Cash paid by Hyde, Inc $15,000Asset BOriginal Cost $110,000Accumulated Depreciation (to date of exchange) $47,000Fair Value at date of exchange $75,000Cash paid by Hyde, Inc $15,000Instructions:(a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.(b) Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.
FEEBLE Co. exchanged equipment with WEAK, Inc. Pertinent data are shown below: FEEBLECo. WEAK,Inc. Equipment 4,000,000 8,000,000Accumulated depreciation 800,000 3,200,000Carrying amount 3,200,000 4,800,000Fair value ? 4,400,000Cash paid by FEEBLE to WEAK 600,000 600,000In FEEBLE’s books, what amounts are recognized for the following?Equipment Gain (Loss)a. 5,000,000 1,200,000b. 4,400,000 600,000c. 3,800,000 1,200,000d. 3,400,000 (600,000)Use the following information for the next three questions:Altitude Company purchased a plot of land for ₱2,000,000 as a plant site. There was a small officebuilding on the plot, conservatively appraised at ₱700,000 which the company will continue to use withsome modification and renovation.The renovation had plans drawn for a factory and received bids for its construction. It rejected all bidsand decided to construct the plant itself. Below are listed additional items that management feels shouldbe included in the property, plant and equipment…
Item 22 Below is information relative to an exchange of similar assets by a company. Assume the exchange has commercial substance. Old Equipment Cash Book Value Fair Value Paid $ 49,700 $ 60,500 $ 14,100 The company would record the new equipment at:
The following information relates to an exchange of assets by Wharton Company. The exchange lacks commercial substance. Old Equipment Book Value Fair Value Cash Paid Case I $75,000 $85,000 $15,000 Case II $50,000 $45,000 $7,000 For Case I, Wharton records the equipment at $ on its books and reports a gain or (loss) of $ on the exchange.
The partners of the Liwa Engineering Company have decided to terminate the business. The balances of the company's accounts prior to the liquidation are given in the Table 1. Table 1 Book value in OMR Cash 28,500 Plant assets (net) 75,000 Machinery and equipment (net) 2,500 Inventories 1,300 Liabilities 47,300 Capital, Partner 1 36,000 Capital, Partner 2 24,000 Additional information: The partner 1 and the partner 2 share profits and losses in the ratio 7:3. In the process of liquidation, the non-cash assets are sold for OMR 125,000. Required: A. You are asked to prepare a schedule of cash payments (Table 2), showing how cash will be distributed between the partners as it becomes available. B. Based on the information above (Table 2 – Schedule of Cash Payments), journalize the transactions.
Below is the information relative to an exchange of assets by Bramble Corporation. The exchange lacks commercial substance. Old Equipment Book Value Fair Value Cash Paid Case I $456000 $522000 $81500 Case II $304000 $272500 $42900 Which of the following would be correct for Bramble to record in Case I? Record Equipment at: Record a gain (loss) of: $456000 $(31500) $537500 $0 $603500 $66000 $537500 $66000
On March 1, Al-Quds Co. exchanged productive assets with Birzeit Co. Al-Quds's asset is referred to below as "Asset A", and Birzeit's is referred to as "Asset B". The following facts pertain to these assets. Assume the exchange lacks commercial substance. Information Al-Quds Company Birzeit Comp (Asset A) (Asset B) Original cost $200,000 $100,000 Acc. dep. to date of 90,000 30,000 exchange Fair value at date of 160,000 exchange Cash received 30,000 Cash paid 30,000 The recognized gain by Al-Quds Company is: a. $40,625 b. $9,375 c. $50,000 d. $10,000
Below is the information relative to an exchange of old equipment for new equipment by Ehrlich Company. Old Equipment Book Value Fair Value Cash Paid $450,000 $510,000 $90,000 The old equipment had a cost to Ehrlich of $600,000. Show your calculations of the gain or loss incurred on the exchange. 1. Prepare the journal entry for Ehrlich to record the exchange of the equipment assuming the exchange lacks commercial substance. 2 Prepare the journal entry for Ehrlich to record the exchange of the equipment assuming the exchange has commercial substance. 3. Assume instead that the machine was sold for cash on 1/1 for $430,000. Prepare the necessary journal entry.
Below is the information relative to an exchange of assets by Oriole Company. The exchange lacks commercial substance. Old Equipment Book Value Fair Value Cash Paid Case | $464000 $512000 $87500 Case II $287000 $253500 $41100 Which of the following would be correct for Oriole to record in Case II? Record Equipment at: Record a gain (loss) of: Select answer from the options below $294600 $(33500) $287000 $(7600) $328100 $33500 $287000 $7600
Below is the information relative to an exchange of assets by Marigold Corporation. The exchange lacks commercial substance. Old Equipment Book Value Fair Value Cash Paid Case I $426000 $502000 $90500 Case II $277000 $259500 $37500 Which of the following would be correct for Marigold to record in Case II? Record Equipment at: Record a gain (loss) of: $277000 $20000 $314500 $17500 $297000 $(17500) $277000 $(20000)