Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 10, Problem 10.12BE
Nonmonetary exchange
• LO10–6
Refer to the situation described in BE 10–11. Answer the questions assuming that the fair value of the equipment was $24,000, instead of $17,000.
BE 10–11
Nonmonetary exchange
• LO10–6
Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment were $20,000 (original cost of $65,000 less
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Exercise 10-16 (Algo) Nonmonetary exchange (LO10-6]
The Bronco Corporation exchanged land for equipment. The land had a book value of $129,000 and a fair value of $168,000. Bronco
paid the owner of the equipment $19,000 to complete the exchange which has commercial substance.
Required:
1. What is the fair value of the equipment?
2. Prepare the journal entry to record the exchange.
* Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
What is the fair value of the equipment?
Fair value
$ 178,000 X
Required 2 >
Exercise 10-17 (Algo) Nonmonetary exchange [LO10-6]
The Bronco Corporation exchanged land for equipment. The land had a book value of $131,000 and a fair value of $172,000. Bronco
received $21,000 from the owner of the equipment to complete the exchange which has commercial substance.
Required:
1. What is the fair value of the equipment?
2. Prepare the journal entry to record the exchange.
Required 1 Required 2
Complete this question by entering your answers in the tabs below.
Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
No
1
X Answer is not complete.
Transaction
1
Equipment - new
Land-old
General Journal
Cash
Gain on exchange of assets
< Required 1
Required 2
<***
Debit
193,000 X
Credit
131,000 X
21,000 X
41,000
4
Required information
[The following information applies to the questions displayed below]
Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $16,000 (original
cost of $36,000 less accumulated depreciation of $20,000) and a fair yalue of $9,800. Kapono paid $28,000 cash to
complete the exchange. The exchange has commercial substance.
Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of
$540,000 and a fair value of $780,000. Kapono paid $58,000 cash to complete the exchange. The exchange has
commercial substance.
Required:
1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
2. Assume the fair value of the old tractor is $22,000 instead of $9,800. What is the amount of gain or loss that Kapono would
recognize on the exchange? What is the initial value of the new tractor?
Complete this question by entering…
Chapter 10 Solutions
Intermediate Accounting, 10 Ed
Ch. 10 - Prob. 10.1QCh. 10 - Prob. 10.2QCh. 10 - Prob. 10.3QCh. 10 - Prob. 10.4QCh. 10 - Prob. 10.5QCh. 10 - Prob. 10.6QCh. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9QCh. 10 - What account is credited when a company receives...
Ch. 10 - Prob. 10.11QCh. 10 - Identify the two exceptions to valuing property,...Ch. 10 - In what situations is interest capitalized?Ch. 10 - Define average accumulated expenditures and...Ch. 10 - Explain the difference between the specific...Ch. 10 - Prob. 10.16QCh. 10 - Prob. 10.17QCh. 10 - Explain the accounting treatment of costs incurred...Ch. 10 - Explain the difference in the accounting treatment...Ch. 10 - Prob. 10.20QCh. 10 - Prob. 10.21QCh. 10 - Prob. 10.22QCh. 10 - Prob. 10.23QCh. 10 - Acquisition cost; machine LO101 Beavert on Lumber...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Asset retirement obligation LO101 Refer to the...Ch. 10 - Prob. 10.6BECh. 10 - Prob. 10.8BECh. 10 - Prob. 10.11BECh. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Prob. 10.14BECh. 10 - Prob. 10.15BECh. 10 - Research and development LO108 Maxtor Technology...Ch. 10 - Prob. 10.18BECh. 10 - Prob. 10.19BECh. 10 - Research and development; various types LO108...Ch. 10 - Prob. 10.21BECh. 10 - Acquisition cost; equipment LO101 Oaktree Company...Ch. 10 - Prob. 10.3ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Acquisition costs; noninterest-bearing note ...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.14ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.16ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - FASB codification research LO101, LO106, LO107,...Ch. 10 - Prob. 10.30ECh. 10 - Prob. 10.31ECh. 10 - Prob. 10.32ECh. 10 - Intangibles; start-up costs LO101, LO108 Freitas...Ch. 10 - Prob. 10.1PCh. 10 - Prob. 10.4PCh. 10 - Acquisition costs; journal entries LO101, LO103,...Ch. 10 - Prob. 10.6PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Judgment Case 101 Acquisition costs LO101, LO103,...Ch. 10 - Judgment Case 104 Interest capitalization LO107...Ch. 10 - Prob. 10.6DMPCh. 10 - Prob. 10.7DMPCh. 10 - Judgment Case 108 Research and development LO108...Ch. 10 - Prob. 10.9DMPCh. 10 - Prob. 10.11DMPCh. 10 - Prob. 10.13DMPCh. 10 - Prob. 10.15DMPCh. 10 - Prob. 10.16DMP
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- Exercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3] On January 1, 2024, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noninterest-bearing note requiring $43,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry to record the acquisition of the tractor. 2. How much interest expense will the company include in its 2024 and 2025 income statements for this note? 3. What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Prepare the journal entry to record the…arrow_forward28 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 choicearrow_forwardExercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3] On January 1, 2021, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $41,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry to record the acquisition of the tractor. 2. How much interest expense will the company include in its 2021 and 2022 income statements for this note? 3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note? O Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Prepare the journal…arrow_forward
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