f a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a fair value of $300,000 plus cash of $100,000 for a new asset, what is the gain or loss recognized on the transaction?

f a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a fair value of $300,000 plus cash of $100,000 for a new asset, what is the gain or loss recognized on the transaction?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 8GI

See similar textbooks

Similar questions

if the exchange has commercial substance, what amount of gain is to be recognized?
In June 2021, Titanic Company acquired a machine in exchanged for a non-monetary asset with a cost of P1,200,000 and an accumulated depreciation of P600,000 and paid a cash difference of P160,000. The market value of the non-monetary asset was determined to be P650,000. If the exchange ha commercial substance, what amount of gain is to be recognized?
A Ltd owns an owner-occupied asset that is measured using the revaluation model. The asset’scarrying amount at the end of the financial year is R20 000. The fair value of the asset is R27 000.The entity has determined the fair value less costs to sell of the asset as R26 000 and the value inuse as R32 000.Required:Explain how you would calculate the carrying value of the asset and at what value the asset shouldbe presented at in the financial statements.
Shak Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is classified as financial asset at fair value through other comprehensive income. The direct acquisition cost incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at P600,000. What gain should be recognized in statement of financial position for the year ended December 31, 20207 Select the correct response 900,000 200,000 800,000
Please show your solution.
Firm M exchanged an old asset with a $11, 500 tax basis and a $29, 000 FMV for a new asset worth $ 22,500 and $6,500 cash. Required: If the exchange is nontaxable, compute Firm M's realized and recognized gain and tax basis in the new asset. How would your answers change if the new asset were worth only $ 11,000, and Firm M received $18,000 cash in the exchange?
Lei Company acquired a financial asset at its market value of P4,800,000. Broker fees of P300,000 were incurred in relation to the purchase. At what amount should the financial asset initially be recognized if it is classified as: 1. At Fair value through profit or loss _________________ 2. As available for sale _____________________
On September 1, 2019, Winans Corporation acquired Aumont Enterprises for a cash payment of £800,000. At the time of purchase, Aumont’s statement of financial position showed assets of £600,000, liabilities of £200,000, and equity of £400,000. The fair value of Aumont’s assets is estimated to be £800,000. Compute the amount of goodwill acquired by Winans.
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
COMPUTE FOR THE GOODWILL.
Stewart Company exchanges an asset with Leonard Corporation. Details of the exchange are as follows: Stewart company’s Piece of Equipment: Cost $1,000,000Accumulated depreciation 400,000Fair Value $800,000 Leonard Corporation’s Building: Cost $1200,000 Accumulated depreciation $550,000 Fair Value $950,000 Required a) Prepare the appropriate journal entries for both companies for the above exchange assumingthey are public companies.b) If Stewart Company paid $100,000 in this transaction. Record the appropriate journal entry inStewart’s books.c) Repeat b) assuming that Stewart Company is a private company and that the fair value ofLeonard’s building is the most determinable fair value
Under IFRS, the recoverable amount of an asset is The higher of an asset’s value in use or its fair value minus costs to sell. The estimated selling price in the ordinary course of business minus the estimated costs of completion and the estimated costs necessary to make the sale. The present value of the future cash flows expected to be derived from an asset. The amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, minus the costs of disposal.