For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and losses as negative values using a leading minus (-) sign. Enter amounts in the format xx,xxx or -xx,xxx. Situation 1: On December 31, Year 1, AS Co. exchanged a used machine for a new machine from LB, Inc. The used machine had a book value of $100,000 ($120,000 cost- $20,000 accumulated depreciation) and a fair value of $90,000. The new machine had a list price of $150,000, and LB gave AS a trade-in allowance of $105,000, with the difference paid in cash. The exchange has commercial substance. Question How much should AS record as the cost of the new machine in Year 1? How much should AS record as a gain (loss), if any, in Year 1? Situation 2: On December 1, Year 1, RF, Inc., exchanged a used truck for a new truck from VA Co. The used truck had a book value of $57,500 ($75,000 cost-$17,500 accumulated depreciation) and a fair value of $60,000. In addition to the exchange of the used truck, RF paid VA $8,000. The exchange has commercial substance. Amount $? $? Question How much should RF record as the cost of the new truck in Year 1? How much should RF record as a gain (loss), if any, in Year 1? Situation 3: On July 1, Year 1, KLK Co. exchanged a used crane for a new crane with ZS Corp. The used crane had a book value of $120,000 ($225,000 cost- $105,000 accumulated depreciation) and a fair value of $125,000. The fair value of the new crane is $110,000. In addition to the exchange of the used crane, ZS paid KLK $15,000. The exchange lacks commercial substance. Amount $? $? Question How much should KLK record as a gain (loss), if any, in Year 1? How much should KLK record as the cost of the new crane in Year 1? S Amount $? $?
For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and losses as negative values using a leading minus (-) sign. Enter amounts in the format xx,xxx or -xx,xxx. Situation 1: On December 31, Year 1, AS Co. exchanged a used machine for a new machine from LB, Inc. The used machine had a book value of $100,000 ($120,000 cost- $20,000 accumulated depreciation) and a fair value of $90,000. The new machine had a list price of $150,000, and LB gave AS a trade-in allowance of $105,000, with the difference paid in cash. The exchange has commercial substance. Question How much should AS record as the cost of the new machine in Year 1? How much should AS record as a gain (loss), if any, in Year 1? Situation 2: On December 1, Year 1, RF, Inc., exchanged a used truck for a new truck from VA Co. The used truck had a book value of $57,500 ($75,000 cost-$17,500 accumulated depreciation) and a fair value of $60,000. In addition to the exchange of the used truck, RF paid VA $8,000. The exchange has commercial substance. Amount $? $? Question How much should RF record as the cost of the new truck in Year 1? How much should RF record as a gain (loss), if any, in Year 1? Situation 3: On July 1, Year 1, KLK Co. exchanged a used crane for a new crane with ZS Corp. The used crane had a book value of $120,000 ($225,000 cost- $105,000 accumulated depreciation) and a fair value of $125,000. The fair value of the new crane is $110,000. In addition to the exchange of the used crane, ZS paid KLK $15,000. The exchange lacks commercial substance. Amount $? $? Question How much should KLK record as a gain (loss), if any, in Year 1? How much should KLK record as the cost of the new crane in Year 1? S Amount $? $?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please don't answer in handwritten & do all three subparts thanku
Transcribed Image Text:For each of the following independent situations, enter the requested amounts
in the associated cells. Record costs and gains as positive values and losses as
negative values using a leading minus (-) sign. Enter amounts in the format
xx,xxx or -xx,xxx.
Situation 1:
On December 31, Year 1, AS Co. exchanged a used machine for a new machine
from LB, Inc. The used machine had a book value of $100,000 ($120,000 cost -
$20,000 accumulated depreciation) and a fair value of $90,000. The new
machine had a list price of $150,000, and LB gave AS a trade-in allowance of
$105,000, with the difference paid in cash. The exchange has commercial
substance.
Question
How much should AS record as the cost of the new machine in Year 1?
How much should AS record as a gain (loss), if any, in Year 1?
Situation 2:
On December 1, Year 1, RF, Inc., exchanged a used truck for a new truck from
VA Co. The used truck had a book value of $57,500 ($75,000 cost - $17,500
accumulated depreciation) and a fair value of $60,000. In addition to the
exchange of the used truck, RF paid VA $8,000. The exchange has commercial
substance.
Amount
$?
$?
Question
How much should RF record as the cost of the new truck in Year 1?
How much should RF record as a gain (loss), if any, in Year 1?
Situation 3:
On July 1, Year 1, KLK Co. exchanged a used crane for a new crane with ZS
Corp. The used crane had a book value of $120,000 ($225,000 cost-
$105,000 accumulated depreciation) and a fair value of $125,000. The fair
value of the new crane is $110,000. In addition to the exchange of the used
crane, ZS paid KLK $15,000. The exchange lacks commercial substance.
Amount
$?
$?
Question
How much should KLK record as a gain (loss), if any, in Year 1?
How much should KLK record as the cost of the new crane in Year 1?
Amount
$?
$?
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