Hook, Line and Floater have continued trading for a further year and they are considering admitting Sinker on 31
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Hook, Line and Floater have continued trading for a further year and they are considering admitting Sinker
on 31 December 20X9. For the purposes of calculating
business as if it were to be sold on 31 December 20X9. This valuation is $750,000. The
financial position
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- Cardinals and the Rams are engaged in a nonmonetary exchange. Specifically, they will exchange their office buildings with each other. The transaction is structured as the following: Cardinals will give Rams its office building a fair market value of $13,000,000 (the original cost of the building is $5,800,000 and the accumulated depreciation on the building is $1,600,000). Rams will transfer their office building to the Cardinals. The original cost of Rams office building is $6,500,000 and the accumulated depreciation on the building is $740,000. In addition to exchanging the buildings, Rams also agrees to pay Cardinals $1,200,000 in cash and transfer 100 popcorn machines with a fair value of $100,000 (original cost of the 100 popcorn machines is $200,000 and the accumulated depreciation is $75,000). Cardinals and Rams record buildings and machines in separate accounts. 1.) prepare the journal entry to record the exchange for the CARDINALS 2.) prepare the journal entry to record…KK Limited owns a property that is used as its head office in Pretoria. On 1st January 2020, itscarrying value was R20 million and its remaining useful life was 20 years. On 1st July 2020, thebusiness recognized cheaper premises found for use as the head office. It was therefore decidedto lease the property under an operating lease. The property was valued by a qualifiedprofessional who assessed the property’s value as R21 million on 1st July and R21.6 million on31st December 2020. Explain the accounting treatment of the property in the financialstatements for the year ended 31st December 2020. (Hint: Income statement and SOFP extractincluding calculations).Pearl’s Delivery Company and Martinez’s Express Delivery exchanged delivery trucks on January 1, 2020. Pearl’s truck cost €22,500. It has accumulated depreciation of €15,500 and a fair value of €3,300. Martinez’s truck cost €8,500. It has accumulated depreciation of €6,800 and a fair value of €3,300. The transaction has commercial substance. Journalize the exchange for Pearl’s Delivery Company Account Titles and Explanation Debit Credit Equipment Accumulated Depreciation-Equipment Loss on Disposal of Plant Assets Equipment please make sure the answer is correct 100%
- GEE Company and EYCH Inc. decided to exchange machineries on January 1, 2019. The machine of GEE (Machine G) was purchased in January 1, 2016 for $1,000,000. The estimated useful life of the machine is 10 years, with no residual value. On the date of the exchange, Machine G's fair value is $680,000. EYCH's machine (Machine H) was purchased on January 1, 2018, for $2,500,000. The estimated useful life of the machine is 5 years, with no residual value. The fair value of Machine H on the date of exchange is $2,100,000. Because of the difference in the fair values, included in the agreement is a stipulation wherein GEE shall pay $1,500,000. The exchange is considered to be with commercial substance. How much shall EYCH Inc. initially recognize Machine G? A. $600,000 B. $2,000,000 C. $680,000 D. $2,100,000You are working at a hedging unit of a multinational company. You are given the following information: USD/MYR SGD/MYR 4.3224/36 3.0043/56 Spot Forward: 1-month 15/19 8/12 3-month 23/39 (a) Calculate the 3-month forward bid and offer rates of SGD/MYR. (b) Assume the no-arbitrage 3-month forward rate of SGD/MYR is 2.9980, illustrate an arbitrage strategy to profit from the mispricing opportunity without using calculation.On October 1, 2024, Wildhorse Corporation ordered some equipment from a supplier for 322,000 euros. Delivery and payment are to occur on November 15, 2024. The spot rates on October 1 and November 15, 2024, are $1.20 and $1.30, respectively. (a) - Your answer is partially correct. Assume that Wildhorse entered into a forward contract on October 1, 2024, to hedge the firm commitment. The forward rates for euros for November 15 delivery were October 1 November 15 $1.23 $1.30 Furthermore, assume the equipment was purchased and paid for on November 15. Prepare all journal entries needed to record and settle the hedge and to record the purchase of the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
- Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $520,000 and a fair value of $740,000. Kapono paid $54,000 cash to complete the exchange. The exchange has commercial substance. Required: What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that…Juliet Mindanao Technologies licenses its intellectual property to Francis Bautista industries. Terms of the arrangement require Francis Bautista to pay Juliet Mindanao P500,000 an April 1, 20x4 when Francis Bautista first obtains access to Juliet Mindanao's intellectual property, and then to pay Julet Mindanao a royalty of 4% of future sales of products that utilize that intellectual property, Juliet Mindanao anticipates receiving sales-based royalties of P1,000,000 during 20x4 and P1.500.000/year for the years 20x5-20x9. Assume Juliet Mindanao accounts for the Francis Bautista license as a right of use, because Juliet Mindanao's actions subsequent to April 1, 20x4 will affect the benefits that Francis Bautista receives from access to Jullet Mindanao's intellectual property. NOTE: Please answer LETTER D ONLY b. What journal entry would Juliet Mindanao record on April 1. 20x4, when it receives the P500.000 payment from Francis Bautista? c. Assume on December 31, 20x4, Juliet Mindanao…Icebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 16,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 16,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $ 3.40 $ 3.475 December 31, 2020 3.50 3.600 March 1, 2021 3.65 N/A Icebreaker must close its books and prepare financial statements at December 31. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. a-2. What is the impact on…
- Using the goodwill method, what is the JE on 1/1/2018 to indicate the purchase of Dunn's interest?In a like - kind exchange, Greyland exchanged investment - use real property (FMV $210,000, adjusted basis $190,000) for a smaller piece of investment - use property (FMV $200,000) plus $10,000. They will report a $10,000 gain on the exchange. What is their basis in the replacement property? $170,000 $180,000 $190,000 $200,000The Tuvok Company exchanged an old asset with a $125,700 tax basis and a $155,000 FMV for a new asset with a $147,250 FMV. Assume that this transaction is a like-kind exchange. Write all numbers with a comma, but no dollar sign (example: 130,000). a. For the exchange to occur (and be nontaxable), how much boot (if any) does Tuvok needs to receive? b. Calculate the gain realized: Calculate the gain recognized: c. Calculate the basis of the new asset for Tuvok: d. Assume the transaction is not a like-kind exchange and is a taxable transaction. Calculate the gain realized: Calculate the gain recognized:
