On March 31, 2005 JJ Enterprise traded in an old machine having a carrying amount of P1,600,000 and paid cash difference of P600,000 for a new machine having a total cash price of P2,000,000. On March 31,2005, what amount of loss should JJ recognize on this exchange?

On March 31, 2005 JJ Enterprise traded in an old machine having a carrying amount of P1,600,000 and paid cash difference of P600,000 for a new machine having a total cash price of P2,000,000. On March 31,2005, what amount of loss should JJ recognize on this exchange?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Rocky Company trades equipment with a book value of $24,970 for new equipment with a list price of…

A: Step 1: Definition of Trade-in:Trade-in is like exchange wherein an asset is acquired by exchanging…

Q: Keach Company traded machinery with a book value of $285,000 and a fair value of $270,000. It…

A: The book value of the machinery that Keach Company traded is $285,000 and its fair value is…

Q: Provide Correct answer of this one

A: To determine the gain or loss on the trade-in of equipment, we need to compare the book value of the…

Q: Hot Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…

A: As per IAS 16 PPE When PPE are acquired for exchange of another ppe, the same should be valued at…

Q: machine had cost of P600,000, book value of P300,000 and market value of P320,000 at the time of…

A: According to the Security Exchange Commission -Fair Value refers to the price received to sell an…

Q: addition, Kelso paid £45, 500 cash for the new truck. The exchange lacked commercial substance. What…

A: Commercial substance refers to the economic impact of a transaction beyond its accounting treatment.…

Q: Davis Company exchanged an old machine with a cost of $120,000, total accumulated depreciation of…

A: The exchange refers to the situation where old assets are exchanged with new assets. The new…

Q: Part A On 3 January 2022, Xavier Ltd exchanged a machine with Carey Ltd. with a cost of $430 000…

A: Fixed assets are treated as Real Account in Accounting. So when purchase fixed assets then they are…

Q: pharoah manufacturing has equipment that costs $657000 and has accumulated depreciation of $285000.…

A: Gain: It implies a gradual increase in the value of investments or assets held by the business. The…

Q: A machine cost €120,000, has annual depreciation of €20,000, and has accumulated depreciation of…

A: DEPRECIATION EXPENSEDepreciation means gradual decrease in value of assets due to normal wear and…

Q: Cedric Company traded in an old model computer for cleaning equipment.. The old model's book value…

A: The question is based on the concept of Property Plant and Equipment.When assets are exchanged then…

Q: Wanda sold an asset for £10,000. The original cost was £23,000. The asset, which had an estimated…

A: The profit or loss from the disposal of the asset represents the difference between sale amount of…

Q: On January 1, 2006, Mill Company sold a building and received as consideration P1,000,000 cash and a…

A: Given,Book Value = P 1,000,000Face Value = P 4,000,000Rate = 10%Present Value = 0.75

Q: In 2015, Bambung Corporation acquired production machinery at a cost of £416,000, which now has a…

A: The objective of the question is to calculate the amount of loss on impairment that Bambung…

Q: During the current year, Ayayai Construction Ltd. traded an old crane that had a book value of…

A: Exchange of assets refers to transactions where one entity swaps one asset for another. Accounting…

Q: Marigold Corp. received $135000 in cash and a used computer with a fair value of $303000 from…

A: Formula: Gain on exchange = Cash received on exchange + fair value of computer - Undepreciated.…

Q: JK Corp traded some used Machinery with book value of $60,000 (accumulated depr $50,000) and a FMV…

A: Formulas:

Q: Pina Colada Corp. exchanges old delivery equipment for new delivery equipment. The book value of the…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: At the beginning of 2022, Suarez Corp. traded in an old machine for a newer model, a change which…

A: Book value of asset is the difference between original cost of asset and accumulated depreciation…

Q: Please help with this question

Q: Line Company exchanged a car from its inventory for a computer system to be used in its…

A: Solution: In case of exchange of assets having commercial substance, assets received and asset given…

Q: Cedric Company recently traded in an older model of equipment for a new model. The old model's book…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a…

A: The Book value is the value of an asset or a company's equity reported on its financial statements,…

Q: Grouper Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080…

A: Journal entries are prepared to record the financial and non financial transactions of the business…

Q: A machine cost $1128000, has an annual depreciation of $188000, and has a accumulated depreciation…

A: Step 1: Step 2:Proper amount of cash paid means = Fair value of new asset - fair value of old…

Q: Rocky Company trades equipment with a book value of $24.970 for new equipment with a list price of…

A: The Difference Between cost of the asset with sale value are considered for computing gain or loss.

Q: On January 1, 2025, Bridgeport Corporation sold a building that cost $264,310 and that had…

A: Non-cash consideration refers to the payment against a purchase of an asset in the form of any other…

Q: Marigold Corporation traded a used truck for a new truck. The used truck cost $25,000 and has…

A: The journal entries are prepared to record the transactions on regular basis. In case of exchange…

Q: Reason Inc. sold its old equipment with original cost of P2,000,000 and accumulated depreciation of…

A: Solution Working note Carrying amount of equipment = original cost - accumulated depreciation. =…

Q: Grouper Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080…

A: FOB stands for Free on Board. It is the term used during shipment to show whether the seller or…

Q: 2001 for a value of $75,000. If the Company had barrowed money from the bank it w outd 8%. What is…

A: In the given case, the company has purchased the crane on 1st January 1997 for 75,000 payable on…

Q: P400,000. Compute the gain or loss from disposal of Vehicle. (Use negative sign if your answer is…

A: Trade-in allowance It is the reduction in the trade value of an asset offered for sale by the…

Q: Sheffield Company traded a used truck for a new truck. The used truck cost $44,700 and has…

A: The journal entries are prepared to record the transactions on regular basis. The book value of the…

Q: A company purchased a machine valued at $70,000. It traded in an old (similar) machine for a $9, 400…

A: Accumulated Deprecation is a fiscal account term that represents the total deprecation…

Q: customer has returned unwanted goods and the company has agreed to refund the customer in full.…

A: Net assets are the value of assets minus the liabilities of the company. In other words, the net…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: Solution:- Given, Calaveras Tire exchanged equipment for two pickup trucks. Book Value of equipment…

Q: A printer that cost $600 and has been owned for 2 years is traded in for a new one. Depreciation in…

A: The term profit and loss (P&L) statement refers to a budget that summarizes the revenues, costs,…

Q: Can you answer this question?

A: To determine the gain or loss realized by Jenkins Corporation, you subtract the adjusted basis of…

Q: Please solve the issue

A: Step 1: Introduction to the Capital GainsCapital gains is applicable on assets which is inclusive of…

Q: ABC Co. exchanged a used machine with XYZ Co. for a similar machine with less use. ABC Co. machine…

A: When assets are acquired through exchange with similar assets that are considered as non-monetary…

Q: On January 2, 2020, Coronado Industries traded in an old delivery truck for a newer mod Old Truck…

A: Cost of new truck fo financial accounting= cash paid with trade in +50% of accumulated depreciation…

Q: Solving. On January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was…

A: A note receivable is a composed guarantee to get a particular measure of money from one party on or…

Q: Your answer is incorrect. On January 1, 2025, Culver Corporation sold a building that cost $259,320…

A: Gain on sale refers to the profit or positive difference between the amount received from the sale…

Q: A company recently traded in an older model of equipment for a new model. The old model's book value…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: On july 1, 2021, PAOLO exchanged its-non-monetary asset (equipment) with YEN's non-monetary asset…

A: The exchange has significantly changed the cash flows of each entity. the value of new assets will…

Q: ZY Corporation exchanges its old equipment and USD100,000 cash for new equipment. The old equipment…

A: The cost of new equipment is calculated as sum of book value of old asset and cash paid for…

Question

On March 31, 2005 JJ Enterprise traded in an old machine having a carrying amount of P1,600,000 and paid cash difference of P600,000 for a new machine having a total cash price of P2,000,000.

On March 31,2005, what amount of loss should JJ recognize on this exchange?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Johnson Co. trades in a machine with a book value of $10,000 for a new machine with a list value of $12,000. In addition to the old machine, Johnson also pays $5,000 cash. The gain or loss on this exchange (which has commercial substance) would be how much? Multiple choice question. $2,000 loss $2,000 gain $3,000 loss $3,000 gain
P5.1B (LO 2,4,5) (Various Time Value Situations) Answer each of these unrelated questions. a. On January 1, 2025, Manatee Corporation sold a warehouse that cost $411,000 and that had accu- mulated depreciation of $163,000 on the date of sale. Manatee received as consideration a $400,000 non-interest-bearing note due on January 1, 2029. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 8%. At what amount should the gain from the sale of the building be reported? b. On January 1, 2025, Manatee Corporation purchased 1,000 of the $1,000 par value, 6%, 20-year bonds of Fishes Inc. The bonds mature on January 1, 2045, and pay interest annually beginning January 1, 2026. Manatee purchased the bonds to yield 8%. How much did Manatee pay for the bonds? c. Manatee Corporation bought new equipment and agreed to pay for it in five equal annual install- ments of $10,000…
A company exchanged old equipment and $18,200 cash for similar equipment. The book value and the fair value of the old equipment were $81,000 and $91,800, respectively. Assuming that the exchange has commercial substance, the company would record a gain(loss) of:
Want to give you a correct answer
3. Subject :- Accounting
Pensacola Inc. purchased equipment on January 1, 2016 for $135,000. Ater 3 years Pensacola exchanged the equipment for a truck from Mam, Inc in a non-monetary exchange. The balance in the Accumulated Depreciation account at the time of the exchange was $75,000. Assume the exchange lacks commercial substance. At the time of the exchange, the fair value of the equipment was $77 000 and the fair vallue of the truck was $57,000. Miami paid 520,000 cashtoot to Pensacola What is the cost basis of the truck acquired by Pensacola? O $44,415 $52,585 $57,000 O $40,000 O None of the above
ABC Furniture uses the installment sales method. No further collections could be made on an account with a balance of P12,000. It was estimated that the repossessed furniture could be sold as is for P3,600, or for P4,200 if P200 were spent reconditioning it. The gross profit rate on the original sale was 40%. The loss on repossession wasP3,200.P3,000.P8,000.P8,400.
Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given up were $23,000 (original cost of $69,500 less accumulated depreciation of $46,500) and $18,500, respectively. Assume Calaveras paid $9,500 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks? (2) How much gain or loss will the company recognize on the exchange?
Caine Company exchanged a car from inventory for a computer to be used as a long-term asset. The following information relates to this exchange: Carrying amount of the car, 600,000List selling price of the car, 900,000’ Fair value of the computer, 860,000’; Cash difference paid by Caine, 100,000. What is the cost of the computer acquired in exchange? 1. Indicate the appropriate entries requires for each of the transactions. 2. Will Caine company declare a gain or loss on this transaction?
None
Marigold Corporation traded a used truck for a new truck. The used truck cost $25,000 and has accumulated depreciation of $21,250. The new truck is worth $43,750. Marigold also made a cash payment of $41,250. Prepare Marigold's entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)