A company exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. Old Equipment Cash Book Value Fair Value Received $ 73,800 $ 80,800 $ 12,100 The company would record the new equipment at: Multiple Choice $68,700. $70,200. $72,950. $56,200.
Q: Science Center trades an electron microscope with an original cost of $480,000 and accumulated…
A: Commercial Substance: An exchange of assets has commercial substance when there is a change in the…
Q: Part A: On November 1, Ellery Corp. purchased land by transferring $50,000 cash and a building to…
A: A journal is a detailed account that records all the financial transactions of a business, to be…
Q: A fixed asset with a cost of $25,556 and accumulated depreciation of $23,000 is traded for a similar…
A: Solution: Cost at which new equipment will be recorded = Fair market value of the new equipment =…
Q: Arruza Company exchanged equipment used in its manufacturing operations plus $3,000 in cash for…
A: Calculation of Gain or Loss on exchange of assets: Particulars Arruza Co. LoBianco Co. Fair…
Q: Equipment with an estimated market value of $27,113 is offered for sale at $45,619. The equipment is…
A: Assets means the resources which is owned by business and used in business for earning profits.…
Q: A fixed asset with a cost of $29,006 and accumulated depreciation of $26,105 is traded for a similar…
A: Given that: Cost of fixed asset = $29006 Accumulated Depreciation = $26105 Fair market price of new…
Q: A knitting machine, which had cost $210,000 and had accumulated depreciation of $147,000, was traded…
A: Recording of machinery in books of accounts- Machinery is classified as long term asset of the…
Q: A fixed asset with a cost of $36,671 and accumulated depreciation of $33,004 is traded for a similar…
A: The exchange transactions are incurred to exchange an old asset to acquire similar new asset. The…
Q: Stellar Company exchanged equipment used in its manufacturing operations plus $3,960 in cash for…
A: Journal entry: Journal is a book of prime entry or a book of original entry in which transactions…
Q: Grouper Company exchanged equipment used in its manufacturing operations plus $4,140 in cash for…
A: Grouper Co. Monty Co. Fair Value of Old Equipment 17250 21390 Less: Book Value of Equipment…
Q: Nash Company exchanged equipment used in its manufacturing operations plus 53,120 in cash for…
A: Journal entry records the accounting transactions of a business in a journal book. All the business…
Q: ABC Company purchases a truck by paying $5000 cash and surrendering a piece of equipment with a book…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: On the first day of the fiscal year, a new walk-in cooler with a list price of $51,300 was acquired…
A: When new assets has been purchased and old assets has been given in exchange , then we need to find…
Q: Sale of Equipment Prepare the journal entry for the following transactions: (1) Geysler Company…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: Kerry, Inc., exchanged land and cash of $7,600 for equipment. The land had a book value of $51,000…
A: If an asset is acquired in exchange for a non monetary asset or in combination of monetary and non…
Q: On January 2, Summers Company received a machine that the company had ordered with an invoice price…
A: Accounting equations are on the basis of the dual aspect concept of accounting. It means that every…
Q: Martinez Company exchanged equipment used in its manufacturing operations plus $3,360 in cash for…
A: An exchange of assets with cash consideration is often used in business deals and mergers and…
Q: CONGRATULATIONS Compnay recently acquired two items of equipment: >Acquired a press at an invoice…
A: Fixed asset: It implies to a non-current tangible asset that is used by the business for a period of…
Q: Calculate the gain to be recognized from the exchange. Gain recognized $ SHOW LIST OF…
A:
Q: Asset Traded for Similar Asset A printing press priced at a fair market value of $606,400 is…
A: When one assets is given in exchange of new assets is bought in , then price at which old assets is…
Q: Equipment with an estimated market value of $29,149 is offered for sale at $45,171. The equipment is…
A: Note: When any assets is purchased then that assets should always be recorded in the books at…
Q: Rochester Flour Mills purchased new equipment and made the following expenditures: Purchase price…
A: An expenditure is a payment made to purchase goods or services, whether it is made with cash or…
Q: A company exchanged old equipment for new equipment in two exchange transactions. Each transaction…
A: Commercial substance means the transaction which has impact on the company's financial operation and…
Q: E10-12 Exchange of Assets Goodman Company acquired a truck from Harmes Company in exchange for a…
A: Journal entry for Goodman to record the exchange: S. No. Account Titles and Description Debit…
Q: Rocky Company trades equipment with a book value of $24.970 for new equipment with a list price of…
A: The Difference Between cost of the asset with sale value are considered for computing gain or loss.
Q: The following information relates to an exchange of assets that has commercial substance by Brent…
A: Every company has assets to run the business. Without the Asset, the company cannot run the…
Q: Ivanhoe Company built a warehouse for $396,000. It could have purchased the building for $464,000.…
A: The internal generated goodwill is not recorded the book of accounts as goodwill or shown as profit…
Q: The Bronco Corporation exchanged land for equipment. The land had a book value of $120,000 and a…
A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…
Q: A fixed asset with a cost of $32,265 and accumulated depreciation of $29,039 is traded for a similar…
A: Fixed assets refer to the assets with a considerably longer useful life as compared to current…
Q: Kerry, Inc., exchanged land and cash of $7,700 for equipment. The land had a book value of $52,000…
A: Here equipment should be recognized at fair value of land plus cash
Q: Equipment with an estimated market value of $29,467 is offered for sale at $47,671. The equipment is…
A: Equipment: It consists of the things including machines or tools that are used for a specific…
Q: 3. Donated assets. Cheng Company has recently decided to accept a proposal from the City of Bel Aire…
A: Journal entry:The monetary transaction of the business is recorded in the books of accounts called…
Q: For what amount will LAR record the range?
A: Recording the purchase of an asset is an important ledger entry as it show cases in the balance…
Q: A fixed asset with a cost of $24,737 and accumulated depreciation of $22,263 is traded for a similar…
A: The new equipment with commercial substance should be recorded at fair market value.
Q: Multiple Choice $3,300
A: The question is based on the concept of Business transaction analysis.
Q: Corp. traded in a manual pressing machine for an automated pressing machine and gave $46500 cash.…
A: The journal entries are prepared to keep the record of day to day transactions of the business.
Q: (A) The Martha Corporation had equipment with a cost of $60,000 and book value of $35,000 that she…
A: ANSWER consider the two situation independently is
Q: Item 22 Below is information relative to an exchange of similar assets by a company. Assume the…
A: The objective of the question is to determine the value at which the company would record the new…
Q: Recording Asset Exchanges Minneapolis Inc. has equipment with an original cost of $52,500 and…
A: In a situation where commercial substance exists, any gain or loss on exchange of assets shall be…
Q: A company purchased equipment valued at $263,000. It traded in old equipment for a $164,000 trade-in…
A: Introduction: Depreciation is the decrease in asset value brought on by things like time passing,…
Q: Sale of EquipmentPrepare the journal entry for the following transactions: (1) Geysler Company sold…
A: The objective of the question is to prepare the journal entries for the sale of old equipment by…
A company exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance.
Old Equipment | Cash | |
---|---|---|
Book Value | Fair Value | Received |
$ 73,800 | $ 80,800 | $ 12,100 |
The company would record the new equipment at:
-
$68,700.
-
$70,200.
-
$72,950.
-
$56,200.
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- Pina Company purchased equipment and incurred these costs: Cash price Sales taxes Insurance during transit Annual maintenance costs Total costs $25800 O $27090 O $27930 O $25800 O $27480 1290 390 450 $27930 What amount should be recorded as the cost of the equipment?Question 11 of 11 - 17 : Pina Colada Company exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $31,300 (cost $61,300 less accumulated depreciation $30,000). Its fair value is $41,500, and cash of $6,700 is paid. Prepare the entry to record the exchange. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Include in your journal entry separate account entries for both the new and old equipment.) Account Titles and Explanation Debit CreditCarlos Arruza Company exchanged equipment used in its manufacturing operations plus $3,000 in cash for similar equipment used in the operations of LoBianco Company. The following information pertains to the exchange. Carlos Arruza Co. LoBianco Co. Equipment (cost) $28,000 $28,000 Accumulated depreciation 19,000 10,000 Fair value of equipment 12,500 15,500 Cash given up 3,000 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
- Recording Asset Exchanges Minneapolis Inc. has equipment with an original cost of $84,000 and accumulated depreciation of $48,000. This equipment was traded in for new equipment with a list price of $96,000. The new machine can be purchased without a trade-in for $90,000 cash. The difference between the fair value of the new asset and the market value of the old asset will be paid in cash. Prepare the entry to record acquisition of the new machine under each of the following separate cases. a. The new machine is purchased for cash with no trade-in. b. The transaction has commercial substance. The old equipment is traded in, and $60,000 cash is paid. c. The same as in part b except that the transaction lacks commercial substance. a. Account Name Dr. Cr. Answer Answer Answer Answer Answer Answer b. Account Name Dr. Cr. Equipment (new) Answer Answer Accumulated Depreciation Answer Answer Answer Answer Answer Answer Answer Answer Equipment (old) Answer…On August 1, Crane, Inc. exchanged productive assets with Cheyenne, Inc. Crane’s asset is referred to below as “Asset A,” and Cheyenne’ is referred to as “Asset B.” The following facts pertain to these assets. Asset A Asset B Original cost $117,120 $134,200 Accumulated depreciation (to date of exchange) 48,800 57,340 Fair value at date of exchange 73,200 91,500 Cash paid by Crane, Inc. 18,300 Cash received by Cheyenne, Inc. 18,300 Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Crane, Inc. and Cheyenne, Inc. in accordance with generally accepted accounting principles. Account Titles and Explanation Debit Credit Crane, Inc.’s Books Cheyenne, Inc.’s BooksCONGRATULATIONS Company recently acquired two items of equipment. Acquired a press at an invoice price of 2000000 subject to a 5% cash discount which was taken. Cost of freight and insurance during shipment were 150000 and installation cost amounted to 100000 Acquired a welding machine at an invoice price of 3000000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of 100000 What amount should be reported as total increase in the equipment account as a result of the transactions
- A company exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. Book Value Fair Value Cash Received Equipment A $73,500 $80,100 $11,400 Equipment B 61,800 54,600 $9,200 What would the company record the new equipment (equipment A) as?nt Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales tax $46,000 2, 300 Freight charges for shipnent of equipnent Insurance on the equipnent for the first year Installation of equipment 71e 910 1,100 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet > Record the purchase of equipment. Note: Enter debits before credits. Transaction General Journal Debit Credit Journal entry worksheet 11 Record any expenditures not capitalized in the purchase of equipment. Note Peter Oebits before credita Transaction General Journal Debit Credit 21Recording Asset Exchanges Minneapolis Inc. has equipment with an original cost of $52,500 and accumulated depreciation of $30,000. This equipment was traded in for new equipment with a list price of $60,000. The new machine can be purchased without a trade-in for $56,250 cash. The difference between the fair value of the new asset and the market value of the old asset will be paid in cash. Prepare the entry to record acquisition of the new machine under each of the following separate cases. a. The new machine is purchased for cash with no trade-in. b. The transaction has commercial substance. The old equipment is traded in, and $37,500 cash is paid. c. The same as in part b except that the transaction lacks commercial substance. a. Account Name Dr. Cr. AnswerCashPrepaid InsuranceEquipmentBuildingLandConstruction in ProcessAccumulated DepreciationAccounts PayableProperty Tax PayableAsset Retirement ObligationNote PayableDiscount on Note…
- Crane Company exchanged equipment used in its manufacturing operations plus $3,300 in cash for similar equipment used in the operations of Cheyenne Company. The following information pertains to the exchange. Crane Co. Cheyenne Co. Equipment (cost) $30,800 $30,800 Accumulated depreciation 20,900 11,000 Fair value of equipment 13,750 17,050 Cash given up 3,300 1) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. 2) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.FEEBLE Co. exchanged equipment with WEAK, Inc. Pertinent data are shown be3low: FEEBLE Co. WEAK, Inc. Equipment 4,000,000 8,000,000 Accumulated depreciation 800,000 3,200,000 Carrying amount 3,200,000 4,800,000 Fair value 3,800,000 4,400,000 Cash paid by FEEBLE to WEAK 600,000 600,000 In FEEBLE’s books, what amounts are recognized for the following? Equipment Gain (Loss) a. 5,000,000 1,200,000 b. 4,400,000 600,000 c. 3,800,000 1,200,000 d. 3,400,000 (600,000)Exchanged a display case put in service on 1 April, 2 years prior (original cost $21000, $0 salvage value) for a new display case, list price $25000; terms FOB, destination. The trade-in allowance was $18000 and the balance due of $7000 was paid in cash. Freight costs are $65 and insurance in transit was $45. Display cases are classified as Store and Office Equipment. The estimated useful life of both old and new cases is 10 years. Record this transaction in the GJ. Hint: the cost of the new equipment is $25000.