On August 1, Hani, Co. exchanged machinery with Wahran Co. Hani's asset is referred to below as AssetA, and Wahran's is referred to as Asset B. The following facts pertain to these assets.Asset A (Hani)E96,000Asset B (Wahran)£110,00047,00075,000Original costAccumulated depreciation (to date of exchange)Fair value at date of exchangeCash paid by Hani Co.Cash received by Wahran Co.Required:(a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for40,00060,00015,00015,000both Hani Co. and Wahran Co.(b) Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange forBoth Hyde, Inc. and Wiggins, Inc.

As per IAS-16( Property, Plant and Equipment ) When entity Acquires any Property, Plant and…

(a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Hani Co. and Wahran Co. (b) Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for Both Hyde, Inc. and Wiggins, Inc.

(a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Hani Co. and Wahran Co. (b) Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for Both Hyde, Inc. and Wiggins, Inc.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: They apply to

A: Examples of like-kind properties: The like-kind properties should include assets that fall under the…

Q: The following certain attributes present into a contract to determine whether the arrangements with…

A: Revenue can be recognized when there is a contract with the customers and performance obligation has…

Q: Which among the sentences below is incorrect? A. An entity shall measure a current asset or…

A: Fair value A fair value means the actual price of an asset received if it is sold in the market. In…

Q: re emission allowances (EAs)? How do businesses obtain them? b) Explain how EAs held by an…

A: Pollution: It is the introduction of bad particles into the natural environment. It is the unhealthy…

Q: According to the historical cost principle, assets are measured at the exchange price at the time…

A: Introduction: As per the historical cost principle is one of basic accounting principle, is a…

Q: 3. Statement 1: An entity shall begin.capitalizing borrowing costs as part of the cost of qualifying…

A: Answer is Option c) Both the statements are correct

Q: If the value of an item can be measured and reasonably determined, this item can be recognized in…

A: An item can be recognized in the financial statement if it satisfies certain specified condition.…

Q: 1. Identifiable intangible assets are those intangible assets that: A. have been purchased by the…

A: Intangible assets are those assets which do not have physical existence.

Q: consignor satisfies its performance obligation under consignment contract?

A: Consignment sales are sales made by the one person (consignee) on behalf of the other person…

Q: Which of the following is not considered in the determination of Total Assets after business…

A: In business combination , following are considered for determination of total assets : 1. Fair…

Q: 3. What determines the timing of revenue recognition with respect to licenses of symbolic…

A: Financial Accounting Standards Board (FASB): FASB is an independent 7 member board, of accounting…

Q: According to China accounting standards indicates that goodwill normally is Select one: a.…

A: At the time of acquisitions of one company, the other company is required to pay more amount than…

Q: Fair Value Measurement Concept Question: What does it mean when fair value is paid to transfer a…

A: Fair Value: It is a measurement based on the current market situation. It is not specific to any…

Q: Which of the following statements are correct? I. Borrowing costs incurred in the acquisition,…

A: Answer is Option c) Both I and II

Q: In a sale-leaseback transaction, the owner of an asset sells it and immediately leases it back from…

A: 1.

Q: 64. This refers to the cost an entity would incur to acquire assets on a reporting date Net…

A: The estimated value of depreciation for all producing units in an economy throughout the accounting…

Q: which of the following is correct regarding the sale or exchange of virtual currency: A. no gain or…

A: A financial asset is also subject to the taxation even nowadays trending of the asset which is…

Q: The amount of consideration to which the entity expects to be entitled in exchange for transferring…

A: As per IAS 115 Revenue recognition A performance obligation is an promise to customer to transfer…

Q: Example (E9-20 modified) Tony LoBianco Company exchanged equipment used in its manufacturing…

A: Asset exchange: It is an arrangement in which two parties exchange their assets. This exchange can…

Q: Which of the following statements applies to the recognition of property, plant, and equipment…

A: The property plant and equipment are the long-term assets that help in generating revenues. The IAS…

Q: (TCO B) How are accounting for direct costs, indirect costs, and issuance costs reflected under the…

A: According to IFRS 3 the acquisition method is also called the purchase method which is used for all…

Q: When an investment ceases to be an associate, the fair value of the investment at the date when it…

A: Investment is the amount saved by the investor in order to earn regular income as well as get the…

Q: When accounting for asset exchanges, O when an exchange lacks commercial substance, either a gain or…

A: Asset exchange means when an entity exchanges its asset with another entity and it may involve…

Q: Under PFRS 3, when is a gain recognized in consolidating financial information? a. In a combination…

A: Introduction:- The merger and purchase of several smaller enterprises into a few considerably bigger…

Q: Do U.S. GAAP and IFRS differ in the criteria they use to determine whether a transfer of receivables…

A: International Financial Reporting Standards: They are commonly known as IFRS. It is a set of…

Q: What is the principle for recognition of a financial asset in PFRS 9? A. A financial asset is…

A: Financial asset is a form or type of assets under which rights are obtained to receive future…

Q: Archibald Corporation, a public corporation exchanged an asset with Bass Industries. The following…

A: Journal Entries on the books of Archibald Corp assuming that the exchange would have commercial…

Q: evenue is recognized for sold consignment goods when a. The consignee receives the goods b. When…

A: Solution: Revenue is recognized for sold consignment goods when "The goods are sold by the consignee…

Q: In computing the realized gain in a like-kind exchange, it is necessary to compare A) the fair…

A: market value of the assets given up.

Q: Explain the ‘qualifying asset’ and how do we treat exchange rate differences relating to the…

A: A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for…

Q: Long-term operating assets can be reported on the balance sheet at fair value instead of historical…

A: The question is asking whether long-term operating assets can be reported at fair value instead of…

Q: PAS 21 prescribes disclosure of the following, except for Select the correct response: Accounting…

A: 1) PAS 21 does not prescribe disclosure of accounting policy and method of presentation. Therefore,…

Q: requirements of the principle of recognition and A qualifying asset is an asset that meets the an…

A: Asset is the property which the company is having or the property which company owns. Like the plant…

Q: The unamortized excess account is a. the excess purchase cost that is attributable to goodwill. b.…

A: The unamortized excess account seems to be the account that is utilized to allocate the amount of…

Q: allocated to the award credits when it fulfils its obligations in respect of the awards. a. All…

A: Correct option is c i.e 2nd statement is incorrect while the 1st statement is correct Explanation:

Q: Which of the following factors, if present, would indicate that a transaction is not a contribution?…

Question

On August 1, Hani, Co. exchanged machinery with Wahran Co. Hani's asset is referred to below as Asset
A, and Wahran's is referred to as Asset B. The following facts pertain to these assets.
Asset A (Hani)
E96,000
Asset B (Wahran)
£110,000
47,000
75,000
Original cost
Accumulated depreciation (to date of exchange)
Fair value at date of exchange
Cash paid by Hani Co.
Cash received by Wahran Co.
Required:
(a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for
40,000
60,000
15,000
15,000
both Hani Co. and Wahran Co.
(b) Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for
Both Hyde, Inc. and Wiggins, Inc.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Recognition of Property , Plant and Equipment as per IAS -16

VIEW

Step 2 Journal Entries in the books of Hani and Wahran

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The second step in applying the basic TCSA rules is: Select one: a. to determine the ACA for the joining entity's asset Incorrect b. to spread the ACA over the joining entity. c. to determine the ACA for the joining entity. d. to spread the ACA over the joining entity's assets.
Under IFRS, revenue from barter transactions should be measured based on the fair value of revenue from: A . similar barter transactions with unrelated parties.
Long-term operating assets can be reported on the balance sheet at fair value instead of historical cost. Does this statement apply to IFRS and U.S. GAAP? Group of answer choices It does not apply to IFRS and U.S. GAAP. It applies to U.S. GAAP only. It applies to both IFRS and U.S. GAAP. It applies to IFRS only.
According to U.S. GAAP, when should revenue be recognized?a. When cash is received from the customerb. When the service is performed or the goods have been delivered to the customerc. When the goods or services have been priced and offered for saled. At the stated date in the contract
25. A parent company’s investment account would include an element which is representative of : Multiple Choice the unrecorded difference between fair value and book value of the investee’s assets. the unrecorded book value of the investor’s assets. the goodwill accrued since the purchase of the investee. the recorded current value of the investee’s assets.
TRUE OR FALSE Typically, intangible assets are shown on a company’s balance sheet at fair value.
Under IFRS, revenue from barter transactions should be measured based on the fair value of revenue from: B . similar non-barter transactions with related parties
Statement I: In case of doubt, a contract purporting to be a sale with right of repurchase is construed as an assignment of rights. Statement II: The creditors of the vendor cannot make use of the right of redemption against the vendee until after exhausting the property of the vendor. Only Statement I is true. Only Statement II is true. Both statements are true. Both statements are false.
What is a consignment arrangement? Explain the accounting treatment of goods held on consignment.
The leverage multiplier employed in the DuPont ratio would be higher if the firm bought back some of its equity shares. 1) True O 2) False
4. Entity A issues an instrument that is re-purchasable by delivering cash or another financial asset. However, Entity A's and financial liability remain unaltered. delivo 1ssues an instrument that is re-purchasable by
Statement 1: Measurement period is relevant if Fair Value of Net Assets of acquiree includes the recognition of the contingent asset, contingent liability, and assets/liabilities with provisional amounts. Statement 2: Measurement period is relevant for the remeasurement fo all contingent considerations. A. Both Statetements are Correct B. Both Statements are Incorrect C. Only Statement 1 is Correct D. Only Statement 2 is Correct