Transcription for Educational Website:---**Exchange of Assets: Nate’s Hot Dogs and Lizzy’s Lemonade**Nate’s Hot Dogs exchanges long-term assets with Lizzy’s Lemonade. Nate receives a delivery truck and gives up a piece of machinery. The fair value and book value of the machinery were $31,000 and $20,000 (original cost of $31,000 less accumulated depreciation of $11,000), respectively. Since the delivery truck was worth $35,000, Nate paid an additional $4,000 in cash to Lizzy.**Task:**Record the exchange for Nate’s Hot Dogs. *(If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)*---**Journal Entry Worksheet:**| Transaction | General Journal | Debit | Credit ||-------------|----------------------|-------|--------|| 1 | | | || | | | || | | | || | | | |**Instructions:**- Enter debits before credits.**Options:**- [Record entry]- [Clear entry]- [View general journal]---

Journal means the book of prime entry where all entries are recorded in different pages. Ledger…

Answered: Dogs exchanges long-term assets with…

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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Brenda Baines sells land to Carla Chandler for $15,000 cash and a piece of equipment with an adjusted basis of 43. $15,000 and a fair market value of $20,000. The land was subject to a $25,000 mortgage which Carla assumed. Brenda incurred $2,500 in selling expenses. What is the amount realized by Brenda? a. $55,000 b. $60,000 c. $52,500 d. $57,500
Angel owned a property costing Php. 2,000,000.00. She exchanged her property with the lot of Princess with an FMV of Php. 2,500,000.00. The parties have agreed that Angel will pay an additional cash of Php. 300,000.00. COMPUTE THE GAIN ON EXCHANGE THAT ANGEL SHOULD RECOGNIZE
1. In 2020, Chris sold a painting to Bernie for $40,000. Chris received $10,00 in 2020 and will receive $30,000 in 2021. Chris bought the painting in 2016 for $15,00O. Bernie did not pay Chris $30,000 when it was due, and after numerous attempts to collect (and $1,000 in expenses), Chris repossessed the paining in 2021. The painting was worth $45,000 when repossessed. "What is Chris's recognized gain in 2020? a. $25,000 b. $10,000 c. $6,250 What are the results of the repossession to Chris? a. $45,000 LTCG; basis = $45,000 b. $33,750 LTCG; basis = $45,000 c. $33,750 LTCG; basis = $44,00 d. $32,750 LTCG; basis = $45,000
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Gwen sold some equipment for $10,250 in cash, $1,000 of marketable securities, the buyer assumption of her $1,500 loan and incurred selling expenses of $500. She had purchased the equipment several years ago for $22,000. On November 10th of the current year, the computer was worth $11,50O. If $11,500 of depreciation deductions had been taken, answer the following questions. a. What is the Gwen's amount realized in the transaction? b. What is Gwen's adjusted basis in the equipment? c. What is Gwen's recognized gain or loss? d. How is Gwen's gain taxed?
Rafael sold an asset to Jamal. What is Rafael's amount realized on the sale in each of the following alternative scenarios? c. Rafael received $20,000 cash, a parcel of land worth $50,000, and marketable securities of $10,000. Rafael also paid a commission of $8,000 on the transaction.
A transfers land to Newco in exchange for 100% of Newco's stock. The land has a basis of $50, FMV of S100 and is subject to a mortgage of S40. A) What are the consequences to each of the parties? B) Suppose in that the mortgage was placed on the property immediately before the transfer to Newco. A wanted cash in order to buy a yacht to be used for personal purposes, so he took out a mortgage on the land. Would this change your answer C) Suppose instead that the mortgage was for $60. Suppose further that this mortgage was incurred on the purchase of the property many years ago. Would this change your answer? D) Same as (c) except that A also transfers accounts payable of $10. A is a cash basis taxpayer. How would this change your answer?
Jerry Tasch’s will has the following provisions: $150,000 in cash goes to Thomas Thorne. All shares of Coca-Cola go to Cindy Phillips. Residence goes to Kevin Simmons. All other estate assets are to be liquidated with the resulting cash going to the First Church of Freedom, Missouri. Prepare journal entries for the following transactions: Discovered the following assets (at fair value): Collected interest of $7,000. Paid funeral expenses of $20,000. Discovered debts of $40,000. Located an additional savings account of $12,000. Conveyed title to the residence to Kevin Simmons. Collected life insurance policy. Discovered additional debts of $60,000. Paid debts totaling $100,000. Conveyed cash of $150,000 to appropriate beneficiary. Sold the shares of Polaroid for $112,000. Paid administrative expenses of $10,000.
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Isaac buys a piece of land as an investment, paying $20,000. Three years later he trades the land to Isadore for a piece of land worth $26,000. Isaac holds the new land as an investment 1) What is Isaac’s adjusted basis in the new property he receives? 2) What is Isaac’s holding period in the new land he receives?
Jack exchanged a forklift used in his business with Joe for a different forklift. Jack's forklift had a $50,000 FMV and $30,000 basis along with $5,000 cash. Joe's basis in his forklift was $35,000. What gain/loss must Jack and Joe recognize?

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