Financial Accounting Cutshall Industries Inc. exchanged old equipment and $22,500 cashfor similar equipment. The book value and the fair value of the oldequipment were $95,600 and $110,200, respectively.Assuming that the exchange has commercial substance, what is thegain or loss to be recorded by Cutshall Industries Inc.?

To determine the gain or loss on the exchange, we need to calculate the difference between the fair…

Answered: Cutshall Industries Inc. exchanged old…

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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Alamos Co. exchanged equipment and $17,000 cash for similar equipment. The book value and the fair value of the old equipment were $80,700 and $90,700, respectively. Assuming that the exchange has commercial substance, Alamos would record a gain/(loss) of:
Foxtrot Co. exchanged equipment and $17,100 cash for similar equipment. The book value and the fair value of the old equipment were $81,000 and $91,700, respectively. Assuming that the exchange lacks commercial substance, Foxtrot would record a gain/(loss) on exchange of assets in the amount of: Multiple Choice $(10,700). $0. $10,700. $27,800.
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?
Sheridan Corp. exchanged similar pieces of equipment with Elongo Corp. No cash was exchanged. Since this exchange will not significantly change the economic position of either company, this transaction lacks commercial substance. At this time, the carrying amount of Sheridan's asset is $37300, while the carrying amount of Elongo’s asset on their books is $33500. However, it has been reliably determined that the fair value of Sheridan’s asset is $37500, while the fair value of Elongo’s asset is $36800. Given these facts, at what amount should Sheridan record the asset it receives from Elongo? $37300 $36800 $37500 $33500 Only typing answer Please explain step by step
Sheridan Corp. exchanged similar pieces of equipment with Elongo Corp. No cash was exchanged. Since this exchange will not significantly change the economic position of either company, this transaction lacks commercial substance. At this time, the carrying amount of Sheridan's asset is $37300, while the carrying amount of Elongo’s asset on their books is $33500. However, it has been reliably determined that the fair value of Sheridan’s asset is $37500, while the fair value of Elongo’s asset is $36800. Given these facts, at what amount should Sheridan record the asset it receives from Elongo? please choose between these three the right answer. .$36800 $37500 $33500
Please explain aboug your asnwer. Sheridan Corp. exchanged similar pieces of equipment with Elongo Corp. No cash was exchanged. Since this exchange will not significantly change the economic position of either company, this transaction lacks commercial substance. At this time, the carrying amount of Sheridan's asset is $37300, while the carrying amount of Elongo’s asset on their books is $33500. However, it has been reliably determined that the fair value of Sheridan’s asset is $37500, while the fair value of Elongo’s asset is $36800. Given these facts, at what amount should Sheridan record the asset it receives from Elongo? $37300 $36800 $37500 $33500
New Corp. traded an old machine with book value of $60,000 (original cost $110,000) and a fair value of $90,000. New received a machine with a fair value of $80,000 plus cash of $10,000. 1) Prepare the journal entry to record the exchange. Assume the exchange has commercial substance. 2) Prepare the journal entry to record the exchange assuming that the exchange has no commercial substance.
King Corp. traded an old machine with book value of $60,000 (original cost $110,000) and a fair value of $90,000. King received a machine with a fair value of $80,000 plus cash of $10,000. 1) Prepare the journal entry to record the exchange. Assume the exchange has commercial substance. 2) Prepare the journal entry to record the exchange assuming that the exchange has nocommercial substance.
Hoyle Company traded machinery with a book value of $680,000 and a fair value of $720,000. In exchange, it received a machine with a fair value of $800,000. Hoyle also paid cash of $80,000 in the exchange. What amount of gain or loss should Hoyle recognize on the exchange (assuming the exchange lacks commercial substance)? Hart Corporation owns machinery with a book value of $570,000. It is estimated that the machinery will generate future cash flows of $600,000. The machinery currently has a fair value of $420,000. How much asset impairment loss should Hart recognize?
Grabrille Inc. and Lucy Company have an exchange with no commercial substance. The asset given up by Gabrille has a book value of P120,000 and a fair value of P135,000. The asset given up by Lucy has a book value of P220,000 and a fair value of P200,000. Cash of P65,000 is received by Lucy. What amount should Gabrille record for the asset received? a. 200,000 b. 110,000 c. 185,000 d. 135,000
Vaughn Inc. and Cullumber Co. have an exchange with no commercial substance. The asset given up by Vaughn Inc. has a book value of $61000 and a fair value of $96000. The asset given up by Cullumber Co. has a book value of $126000 and a fair value of $111000. Boot of $31000 is received by Cullumber Co.What amount should Vaughn Inc. record for the asset received? $126000 $96000 $111000 $92000
Clark Co. and Keys Inc. exchange equipment. Information related to this exchange follows. Equipment given up: Clark Co. Keys Inc. Accumulated depreciation Equipment (original cost) $54,000 $63,000 18,000 21,600 32,400 43,200 (10,800) 10,800 Fair value Cash exchanged Required a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. c. Record the exchange for Clark Co. assuming the transaction lacks commercial substance. d. Record the exchange for Keys Inc. assuming the transaction lacks commercial substance. Exchange has Commercial Substance Exchange Lacks Commercial Substance a. Record the exchange for Clark Co. assuming the transaction has commercial substance. b. Record the exchange for Keys Inc. assuming the transaction has commercial substance. a. Account Name Dr. Cr.

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