On September 30, 2020 AssetsToGo Company (ATG) agreed to an exchange of assets with another company. ATG gave up a machine with an original cost of $50,000. $30,000 in accumulated depreciation had been recorded on this machine over the course of ATG’s ownership. ATG determined that the machine being given up had a fair value of $18,000. ATG also paid $7,000 in cash. Assume that ATG follows IFRS and that the transaction has commercial substance. You have recently been hired in the accounting department of ATG and are preparing the entries to record the exchange of assets. What is the net carrying value of the machine on September 30, 2020 immediately prior to the exchange on ATG’s books? What is the total cost to ATG of the new machine acquired? What is the impact on ATG’s machinery assets account in 2020 as a result of the exchange of machinery? Ignore accumulated depreciation. What is the impact on ATG’s net income in 2020 as a result of the exchange of assets? A. $2,000 decrease B. $25,000 C. None of the other alternatives are correct. D. $20,000 E. $30,000 F. $20,000 increase G. $18,000 H. $50,000 I. $25,000 decrease J. $25,000 increase
On September 30, 2020 AssetsToGo Company (ATG) agreed to an exchange of assets with another company. ATG gave up a machine with an original cost of $50,000. $30,000 in
You have recently been hired in the accounting department of ATG and are preparing the entries to record the exchange of assets.
|
|
Step by step
Solved in 2 steps
