Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Caleb Company owns a machine that had cost $46,000 with accumulated depreciation of $20,200. Caleb exchanges the machine for a newer model that has a market value of $56,000.
Record the exchange assuming Caleb paid $31,800 cash and the exchange has commercial substance.
Record the exchange assuming Caleb paid $23,800 cash and the exchange has commercial substance.
Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in allowance and paying the remaining $83,000 in cash. The old tractor had cost $96,000 and had accumulated depreciation of $52,500. Answer the following questions assuming the exchange has commercial substance. 1. What is the book value of the old tractor at the time of exchange? 2. What is the loss on this asset exchange? 3. What amount should be recorded (debited) in the asset account for the new tractor?
Goodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is determined to have commercial substance. The machine cost $30,000, has a book value of $6,000, and has a market value of $8,500. The truck has a cost of $12,000 and a book value of $8,000 on Harmes’ books.
Goodman agrees to pay $500 to complete the exchange.
Chapter 8 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Identify events that might lead to disposal of a...Ch. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Refer to the December 31, 2016, balance sheet of...Ch. 8 - Prob. 20DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Prob. 3QSCh. 8 - Prob. 4QSCh. 8 - Prob. 5QSCh. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Prob. 10QSCh. 8 - Identify the following assets a through i as...Ch. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Caleb Co. owns a machine that costs $42,400 with...Ch. 8 - Prob. 15QSCh. 8 - Prob. 16QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Prob. 14ECh. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - Prob. 23ECh. 8 - On January 2, 2018, Bering Co. disposes of a...Ch. 8 - Prob. 25ECh. 8 - Prob. 26ECh. 8 - Timberly Construction negotiates a lump-sum...Ch. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Onslow Co. purchases a used machine for $178,000...Ch. 8 - Prob. 7PSACh. 8 - Prob. 8PSACh. 8 - Prob. 2PSBCh. 8 - Prob. 4PSBCh. 8 - Prob. 5PSBCh. 8 - Prob. 6PSBCh. 8 - Prob. 7PSBCh. 8 - Prob. 8PSBCh. 8 - Selected ledger account balances for Business...Ch. 8 - Prob. 3FSACh. 8 - Prob. 5BTN
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- Goodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is determined to have commercial substance. The machine cost $30,000, has a book value of $6,000, and has a market value of $8,500. The truck has a cost of $12,000 and a book value of $8,000 on Harmes’ books. Goodman agrees to pay $500 to complete the exchange. Required: Prepare journal entries for Goodman and Harmes to record the exchange. Prepare journal entries for Goodman and Harmes to record the exchange. Assume the exchange occurred on September 23. please only fill in the five availble lines. Thank you! GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5arrow_forwardGoodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is determined to have commercial substance. The machine cost $30,000, has a book value of $6,000, and has a market value of $8,500. The truck has a cost of $12,000 and a book value of $8,000 on Harmes’ books. Goodman agrees to pay $500 to complete the exchange. Required: Prepare journal entries for Goodman and Harmes to record the exchange.arrow_forwardMariot trades in its old equipment (with the following carrying values) for new equipment. Mariot received $4,000 cash on the exchange. The fair value of the new equipment is $14,000. Original cost of old equipment : $10,000 Accumulated Depreciation on old equipment: $6,000 If the transaction lacks commercial substance, what amount does Mariot assign to the new equipment?arrow_forward
- Garcia Co. owns equipment that costs $76,800, with accumulated depreciation of $40,800. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts:arrow_forwardChampion Industries exchanged a dust-scrubbing piece of equipment for another version of the same type of equipment and received $12,000 cash. The old dust scrubber cost $76,200 and had a net book value of $44,000. The new dust scrubber had a fair market value of $60,000. Prepare the journal entry to record the exchange, assuming that the exchange a) has commercial substance, and b) lacks commercial substance.arrow_forwardMetro Inc. trades its used machine for a new model at Denver Co. The used machine has a book value of $42,000 (cost $64,000) and a fair value of $50,000. Metro receives $5,000 cash from Denver. A) Prepare the necessary journal entry by Metro to record this exchange. Assume the exchange has no commercial substance. B) Prepare the necessary journal entry by Metro to record this exchange. Assume the exchange has commercial substance.arrow_forward
- Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000 (original cost of $28,000 less accumulated depreciation of $16,000) and a fair value of $9,000. Kapono paid $20,000 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. Repeat requirement 1 assuming that the fair value of the old tractor is $14,000 instead of $9,000.arrow_forwardConsider each of the following independent situations: a. GYT Co. exchanges a machine that cost $4,000 and has accumulated amortization of $2,560 for a similar machine. GYT also receives $25 in the exchange. The fair market value of the old asset is $750. The fair market value of the new asset is $725. There is no commercial substance to the transaction. b. FST Co. exchanges a machine that cost $4,000 and has accumulated amortization of $3,560 for a similar machine. FST also receives $25 in the exchange. The fair market value of the old asset is $750. The fair market value of the new asset is $725. There is no commercial substance to the transaction. c. LKC Co. pays $250 and exchanges a machine that cost $3,000 and has accumulated amortization of $1,900 for a similar machine. The fair market value of the old asset is undeterminable. The fair market value of the new asset is $690. The transaction has commercial substance. d. HRT Co. pays $250 and exchanges a…arrow_forwardCliff Company traded in an old truck for a new one. The old truck had a cost of $300,000 and accumulated depreciation of $60,000. The new truck had an invoice price of $311,000. Huffington was given a $237,000 trade-in allowance on the old truck, which meant they paid $74,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck? Multiple Choice $240,000 $300,000 $74,000 $311,000 $314,000arrow_forward
- Johnson Co. trades in a machine with a book value of $10,000 for a new machine with a list value of $12,000. In addition to the old machine, Johnson also pays $5,000 cash. The gain or loss on this exchange (which has commercial substance) would be how much? Multiple choice question. $2,000 loss $2,000 gain $3,000 loss $3,000 gainarrow_forwardCompany A had a machine with a carrying amount of 450,000. Company B had a delivery vehicle with a carrying amoung of 300,000. Companies A and B exchanged the machine and vehicle, and Company B paid an additional 90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is 420,000. The exchange has commercial substance. How much gain or loss should be recorded by Company B?arrow_forwardSlaton Corporation traded a used truck for a new truck. The used truck cost $20,000 and has accumulated depreciation of $17,000. The new truck is worth $35,000. Slaton also made a cash payment of $33,000. Prepare Slaton’s entry to record the exchange. (The exchange has commercial substance.)arrow_forward
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