I need help with this General accounting question using the proper accounting approach. A delivery van originally cost $80,000 and has accumulateddepreciation of $60,000. Swift Movers exchanges the old vanfor a new one. The market value of the new van is $68,000, andSwift Movers pays an additional $48,000 in cash.Assume the exchange has commercial substance. What is theresult of this exchange?

Step 1: Define Exchange with Commercial SubstanceAn exchange with commercial substance occurs when…

Answered: A delivery van originally cost $80,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the result of this exchange?
Calculate gross or loss on the exchange
What is the result of this exchange? General accounting
What is the result of this exchange on these financial accounting question?
Company 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?
Champion 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.
Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipmentwere $20,000 (original cost of $65,000 less accumulated depreciation of $45,000) and $17,000, respectively.Calaveras also paid $8,000 in cash. At what amount will Calaveras value the pickup trucks? How much gain orloss will the company recognize on the exchange? Assume the exchange has commercial substance.
Maxim Company exchanged a used machine with a book value of $26,000 (cost $54,000 less $28,000 accumulated depreciation) and cash of $8,000 for a delivery truck. The machine has a estimated fair market of $36,000. The transaction has commercial substance. Regarding the journal entry to record the exchange, what value will be assigned to the delivery truck? O 36,000 O 44,000 O 54,000 O 34,000 Question 17 The cost of training employees to operate newly acquired machinery are usually capitalized as part of the acquisition value of the asset. O True
Company A had a machine with a carrying amount of P450,000. Company B had a delivery vehicle with a carrying amount of P300,000. Companies A and B exchanged the machine and vehicle, and Company B paid an additional P90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is P420,000. The exchange has commercial substance. How much gain or loss should be recorded by Company B?
Sub. General accounting
ZY Corporation exchanges its old equipment and USD100,000 cash for new equipment. The old equipment has a book value of USD70,000 and a fair value of USD50,000 on the date of the exchange. The cost of the new equipment would be then recorded at what?
Winn Company exchanged an old machine having a carrying amount of P16,800, and paid a cash difference of P6,000 for a new machine having a total cash price of P20,500. The cash flows from the new machine are expected to be significantly different than the cash flows from the old machine. What amount of loss should Winn recognize on this exchange?

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