1.
Concept Introduction: Disposals of plant assets occur in three basic ways that are discarding, selling, and exchanging. When property plant and equipment are exchanged, it is first required to ascertain if the exchange has commercial substance. If there is commercial substance, gain or loss on the exchange must be recognized.
The entry for exchange assuming C Co paid $30,000 cash and the exchange has commercial substance.
2.
Concept Introduction: Disposals of plant assets of plant asset occur in three basic ways that are discarding, selling, and exchanging. When property plant and equipment are exchanged, it is first required to ascertain if the exchange has commercial substance. If there is commercial substance, gain or loss on the exchange must be recognized.
The entry for exchange assuming C Co paid $22,000 cash and the exchange has commercial substance.
Want to see the full answer?
Check out a sample textbook solutionChapter 10 Solutions
FUND OF ACCT PRIN (LOOSE)+ACCESS CARD
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education