Dial Co. and Safeguard Inc. engage in an exchange of nonmonetary assets that LACKS commercial substance. Dial gives up an asset with a book value of $20,000and a fair market value of $19,000.Safeguard gives up an asset with a book value of $12,000 and a fair market value of $15,000. Safeguard also paid $4,000 cash boot.What amount should SAFEGUARD record for the asset received and for the gain or loss?O $16,000 and $3,000 gainO $16,000 and $0 gain/lossO $15,000 and $0 gain/lossO $19,000 and $3,000 gain

In SAFEGUARD book, it should be recorded as follows:EntryDebitCreditAsset Account (asset…

Answered: Dial Co. and Safeguard Inc. engage in…

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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Bryant Inc. and Rizzo Co. have an exchange that lacks commercial substance. The asset given up by Bryant Inc. has a book value of $36,500 and a fair value of $48,000. The asset given up by Rizzo Co. has a book value of $50,000 and a fair value of $40,000. Boot of $5,000 is received by Rizzo Co. What amount should Bryant Inc. record for the asset received?
Love Inc. and Life Co. have an exchange with no commercial substance. The asset given up by Love Inc. has a book value of P12,000. The asset given up by Life Co. has a book value of P20,000. Cash of P4,000 is received by Life Co. What amount should Love Inc. record for the asset received?
Vaughn Inc. and Cullumber Co. have an exchange with no commercial substance. The asset given up by Vaughn Inc. has a book value of $61000 and a fair value of $96000. The asset given up by Cullumber Co. has a book value of $126000 and a fair value of $111000. Boot of $31000 is received by Cullumber Co.What amount should Vaughn Inc. record for the asset received? $126000 $96000 $111000 $92000
C Inc. and D Co. have an exchange with no commercial substance. The asset given up by C Inc. has a book value of P12,000. The asset given up by D Co. has a book value of P20,000. Cash of P4,000 is received by D Co. What amount should C Inc. record for the asset received?
Jersey Inc. and Texas Co. have an exchange with no commercial substance. The asset given up by Jersey Inc. has a book value of $160,000 and a fair value of $200,000. The asset given up by Texas Co. has a book value of $260,000 and a fair value of $280,000. Boot of $80,000 is received by Texas Co. What amount should Jersey Inc. record for the asset received?
FAITH Inc and HOPE Co. have an exchange with no commercial substance. The asset given up by FAITH Inc has a carrying amount of P12,000 and a fair market value of P15,000. The asset given up by HOPE Co. has a carrying amount of P20,000 and a fair market value of P19,000. P4,000 is received by HOPE Co. What amount should FAITH Inc record for the asset received?
Sheridan Corp. exchanged similar pieces of equipment with Elongo Corp. No cash was exchanged. Since this exchange will not significantly change the economic position of either company, this transaction lacks commercial substance. At this time, the carrying amount of Sheridan's asset is $37300, while the carrying amount of Elongo’s asset on their books is $33500. However, it has been reliably determined that the fair value of Sheridan’s asset is $37500, while the fair value of Elongo’s asset is $36800. Given these facts, at what amount should Sheridan record the asset it receives from Elongo? please choose between these three the right answer. .$36800 $37500 $33500
Sheridan Corp. exchanged similar pieces of equipment with Elongo Corp. No cash was exchanged. Since this exchange will not significantly change the economic position of either company, this transaction lacks commercial substance. At this time, the carrying amount of Sheridan's asset is $37300, while the carrying amount of Elongo’s asset on their books is $33500. However, it has been reliably determined that the fair value of Sheridan’s asset is $37500, while the fair value of Elongo’s asset is $36800. Given these facts, at what amount should Sheridan record the asset it receives from Elongo? $37300 $36800 $37500 $33500 Only typing answer Please explain step by step
ABC Inc. and XYZ Co. have an exchange with no commercial substance. The asset given up by ABC Inc. has a book value of P48,000 and a fair value of P60,000. The asset given up by XYZ Co. has a book value of P80,000 and a fair value of P76,000. Boot of P16,000 is received by XYZ Co. What amount should ABC Inc. record for the asset received? What amount should XYCZ Co. record for the asset received?
Coronado Inc. and Wildhorse Co. have an exchange with no commercial substance. The asset given up by Coronado Inc. has a book value of $53000 and a fair value of $88000. The asset given up by Wildhorse Co. has a book value of $118000 and a fair value of $111000. Boot of $23000 is received by Wildhorse Co.What amount should Coronado Inc. record for the asset received? $118000 $76000 $111000 $88000
Marigold Corp. received $135000 in cash and a used computer with a fair value of $303000 from Ivanhoe Company for Marigold Corp.'s existing computer having a fair value of $438000 and an undepreciated cost of $407400 recorded on its books. The transaction has no commercial substance. How much gain should Marigold recognize on this exchange, and at what amount should the acquired computer be recorded, respectively? $30600 and $303000 $135000 and $407400 $0 and $272400 $1508 and $183108
Please explain aboug your asnwer. Sheridan Corp. exchanged similar pieces of equipment with Elongo Corp. No cash was exchanged. Since this exchange will not significantly change the economic position of either company, this transaction lacks commercial substance. At this time, the carrying amount of Sheridan's asset is $37300, while the carrying amount of Elongo’s asset on their books is $33500. However, it has been reliably determined that the fair value of Sheridan’s asset is $37500, while the fair value of Elongo’s asset is $36800. Given these facts, at what amount should Sheridan record the asset it receives from Elongo? $37300 $36800 $37500 $33500

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