I am searching for the accurate solution to this general accounting problem with the right approach. Parkview Industries exchanged an old manufacturing system for a new one. The new systemwas priced at $250,000, and they received a trade-in allowance of $120,000 for their oldsystem, resulting in a cash payment of $130,000. The old system had an original cost of$200,000 with accumulated depreciation of $90,000. Assuming the exchange has commercialsubstance, what is the proper amount at which to record the new manufacturing system?

Step 1: Detailed explanation of trade-in transactionsWhen there is commercial substance in an…

Answered: Parkview Industries exchanged an old…

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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Champion Industries exchanged a dust-scrubbing piece of equipment for another version of the same type of equipment and received $12,000 cash. The old dust scrubber cost $76,200 and had a net book value of $44,000. The new dust scrubber had a fair market value of $60,000. Prepare the journal entry to record the exchange, assuming that the exchange a) has commercial substance, and b) lacks commercial substance.
If the transaction has commercial substance, the company should record the new cooling system at
Kaohsiung company exchanges its old office equipment and $85,000 for new office equipment. The old office equipment has a book value of $36,000 and a fair value of $20,000 on the date of the exchange. If this transaction has commercial substance, the cost of the new office equipment would be recorded at a.$85,000. b.$121,000. c.$105,000. d.cannot be determined.
On December 30, 2019, Machine M with a carrying amount of 120,000 (Cost 400,000) and a fair value of P100,000 was exchanged for a similar asset with a fair value of 150,000 . In addition , Charie paid 10, 000 to acquire the new machine . The exchange was recorded by a debit to Machinery and a credit to cash for 20,000 What is the correct cost of the PPE received ?
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1. Denver, Inc., exchanged land and cash of $8,000 for equipment. The land was purchased at $55,000 a few years ago and a fair value of $60,000. Prepare the journal entry to record the exchange. Assume the exchange has no commercial substance. 2. Metro Inc. trades its used machine for a new model at Denver Inc. The used machine has a book value of $8,000 (original cost of $12,000) and a fair value of $4,000. The new model lists for $15,000. Denver gives Metro a trade-in allowance of $7,000 for the used machine, $3,000 more than its fair value. Prepare a journal entry for Metro, assuming commercial substance.
Maxim Company exchanged a used machine with a book value of $26,000 (cost $54,000 less $28,000 accumulated depreciation) and cash of $8,000 for a delivery truck. The machine has a estimated fair market of $36,000. The transaction has commercial substance. Regarding the journal entry to record the exchange, what value will be assigned to the delivery truck? O 36,000 O 44,000 O 54,000 O 34,000 Question 17 The cost of training employees to operate newly acquired machinery are usually capitalized as part of the acquisition value of the asset. O True
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Information Processing, Inc. (IPI) exchanges its used machine for a new machine with Jerrod Business Solutions Inc. The exchange has commercial substance. IPI’s used machine has a book value of $8,000 (original cost $12,000 less $4,000 accumulated depreciation) and a fair value of $6,000. The new machine has a fair value of $16,000. IPI also pays Jerrod Business Solutions $7,000 cash in the transaction. Accounting Issue(s): What is the correct amount that IPI should record for the machine it acquired in the exchange with Jerrod Business Solutions? Question 1: What is the correct amount that IPI should record for the machine it acquired in the exchange with Jerrod Business Solutions? $6,000 $7,000 $8,000 $13,000 $15,000 $16,000
A machine cost $1320000, has annual depreciation of $220000, and has accumulated depreciation of $1045000 on December 31, 2020. On April 1, 2021, when the machine has a fair value of $302500, it is exchanged for a machine with a fair value of $1485000 and the proper amount of cash is paid. The exchange had commercial substance.The new machine should be recorded at $1182500. $1347500. $1457500. $1485000.
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