Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Question
Chapter 11, Problem 11.30E
To determine
To prepare:
Given Information:
Cash paid in exchange of chocolate mixing machine is $31,500.
Fair value of chocolate mixing machine exchanged is $562,500.
Book value of machine is $500,000.
Historical cost of the machine is $1,135,000.
Fair value of new mixing machine is $594,000.
Book value of new machine is $380,000
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Students have asked these similar questions
Pearl’s Delivery Company and Martinez’s Express Delivery exchanged delivery trucks on January 1, 2020. Pearl’s truck cost €22,500. It has accumulated depreciation of €15,500 and a fair value of €3,300. Martinez’s truck cost €8,500. It has accumulated depreciation of €6,800 and a fair value of €3,300. The transaction has commercial substance.
Journalize the exchange for Pearl’s Delivery Company
Account Titles and Explanation
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(Transfer of Receivables with Recourse) Ames Quartet Inc. factors receivables with a carrying amount of $200,000 to Joffrey Company for $160,000 on a with recourse basis.InstructionsThe recourse provision has a fair value of $1,000. This transaction should be recorded as a sale. Prepare the appropriate journal entry to record this transaction on the books of Ames Quartet Inc.
On September 3, 2024, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows:
Robers’ Asset
Phifer’s Asset
Original cost
$ 215,000
$ 235,000
Accumulated depreciation
131,000
139,000
Fair value
103,500
79,500
To equalize the exchange, Phifer paid Robers $24,000 in cash.
Required:
Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter 11 Solutions
Intermediate Accounting
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