Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange areas follows:Goodman’s Piece of equipment:$800,000230,000700,000Pryce's building:CostCost$960,000350,000850,000Accumulated depreciationAccumulated depreciationFair valueFair valueRequired-a) Prepare the journal entry in the books of both Goodman and Pryce, assuming both arepublic companies.b) Assume now that Goodman paid $80,000 in this transaction. Record the appropriate journalentry in Goodman books.c) Repeat b) assuming now that Goodman is a private company and that the fair value ofPryce's building is the most determinable fair value.

Journal entry is the primary entry that records the financial transactions initially.

Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange are as follows: Goodman's Piece of equipment: $800,000 230,000 700,000 Pryce's building: Cost $960,000 350,000 850,000 Cost Accumulated depreciation Accumulated depreciation Fair value Fair value

Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange are as follows: Goodman's Piece of equipment: $800,000 230,000 700,000 Pryce's building: Cost $960,000 350,000 850,000 Cost Accumulated depreciation Accumulated depreciation Fair value Fair value

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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Question

Goodman Company exchanges an asset with The Pryce Corporation. Details of the exchange are
as follows:
Goodman’s Piece of equipment:
$800,000
230,000
700,000
Pryce's building:
Cost
Cost
$960,000
350,000
850,000
Accumulated depreciation
Accumulated depreciation
Fair value
Fair value
Required-
a) Prepare the journal entry in the books of both Goodman and Pryce, assuming both are
public companies.
b) Assume now that Goodman paid $80,000 in this transaction. Record the appropriate journal
entry in Goodman books.
c) Repeat b) assuming now that Goodman is a private company and that the fair value of
Pryce's building is the most determinable fair value.

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