Ayayai Automotive is looking to expand its operations and has approached Dynatech Garage to acquire its business.Dynatech has agreed to sell if Ayayai assumes the mortgage on Dynatech's building as part of the sale. The fair value ofDynatech's identifiable assets and identifiable liabilities are: Inventory: 149000. Buildings: 949000. Land: 349000.Mortage payable (274000). Net identifiable assets: 1,173,000. Assuming Ayayai purchases the business for $Recordthe journal entry for the purchase by Ayayai Automotive. (If no entry is required, select "No entry" for the account titlesand enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indentmanually. List all debit entries before credit entries.) Account Titles Debit Credit 1,324,000

The objective of this question is to record the journal entry for the purchase of Dynatech Garage by…

Answered: Ayayai Automotive is looking to expand…

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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Vinubhai
Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $520,000 and a fair value of $740,000. Kapono paid $54,000 cash to complete the exchange. The exchange has commercial substance. Required: What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that…
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Please show your detailed solution.
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Hoolia Corporation acquires equipment and patents from another company for $50 million and records the acquisition as an asset acquisition. The equipment has a fair value of $19.20 million and the patents have a fair value of $28.80 million. Neither asset is nonqualifying. At what value does Hoolia record the equipment? Select one: a. $25.0 million b. $20.0 million c. $21.2 million d. $19.2 million
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