The property, plant, and equipment accounts for Buffalo Company held the following opening balances on January 1, 2023 (the first day of Buffalo's fiscal year): Land Equipment Accumulated Depreciation-Equipment Machinery Accumulated Depreciation Machinery The following transactions took place during 2023 (assume all transactions took place on January 1): a. b. C. $550,000 774,000 136,000 456,000 163,000 d. Buffalo Company paid $19,000 related to the machinery and $7,000 related to the equipment for maintenance to keep the assets in normal working order. Equipment with an original cost of $41,400 and accumulated depreciation of $29,600 was traded in on some new equipment. The new equipment had a fair value of $53,600, and Buffalo was given a trade in allowance of $4,500 for the old equipment. Buffalo Company made an agreement with GRN Ltd. to exchange two similar plots of land. Buffalo's land had an original cost of $550,000 and a fair value of $764,000. GRN's land had an original cost of $573,900 and a fair value of $804,800. Buffalo also paid $40,800 in cash to GRN as part of the transaction. The exchange lacks commercial substance. Buffalo paid $68,900 on a major upgrade to some of the equipment that significantly increased the economic life of the equipment.
The property, plant, and equipment accounts for Buffalo Company held the following opening balances on January 1, 2023 (the first day of Buffalo's fiscal year): Land Equipment Accumulated Depreciation-Equipment Machinery Accumulated Depreciation Machinery The following transactions took place during 2023 (assume all transactions took place on January 1): a. b. C. $550,000 774,000 136,000 456,000 163,000 d. Buffalo Company paid $19,000 related to the machinery and $7,000 related to the equipment for maintenance to keep the assets in normal working order. Equipment with an original cost of $41,400 and accumulated depreciation of $29,600 was traded in on some new equipment. The new equipment had a fair value of $53,600, and Buffalo was given a trade in allowance of $4,500 for the old equipment. Buffalo Company made an agreement with GRN Ltd. to exchange two similar plots of land. Buffalo's land had an original cost of $550,000 and a fair value of $764,000. GRN's land had an original cost of $573,900 and a fair value of $804,800. Buffalo also paid $40,800 in cash to GRN as part of the transaction. The exchange lacks commercial substance. Buffalo paid $68,900 on a major upgrade to some of the equipment that significantly increased the economic life of the equipment.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 17P: On December 31, 2019, Vail Company owned the following assets: Vail computes depreciation and...
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