Saman Co exchanged a Machinery with Amar Inc. in exchange for a building. Saman also paid 50,000 to Amar for this exchange. Other details of the transaction are provided below: Amar Inc. Building: Saman Co. equipment: Cost Accumulated depreciation 150,000 $950,000 $750,000 Accumulated depreciation 180,000 Cost Fair value 600,000 Fair value 550,000 Required- a) Prepare the journal entry in the books of both companies, assuming both are publicly traded. b) Assuming now that Saman is a private company and that the fair value of building is the most reliable fair value, prepare the journal entry for Saman Co.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Saman Co exchanged a Machinery with Amar Inc. in exchange for a building. Saman also paid
50,000 to Amar for this exchange. Other details of the transaction are provided below:
Saman Co. equipment:
Amar Inc. Building:
$950,000
Accumulated depreciation 150,000
$750,000
Accumulated depreciation 180,000
Cost
Cost
Fair value
600,000
Fair value
550,000
Required-
a) Prepare the journal entry in the books of both companies, assuming both are publicly
traded.
b) Assuming now that Saman is a private company and that the fair value of building is the
most reliable fair value, prepare the journal entry for Saman Co.
Transcribed Image Text:Saman Co exchanged a Machinery with Amar Inc. in exchange for a building. Saman also paid 50,000 to Amar for this exchange. Other details of the transaction are provided below: Saman Co. equipment: Amar Inc. Building: $950,000 Accumulated depreciation 150,000 $750,000 Accumulated depreciation 180,000 Cost Cost Fair value 600,000 Fair value 550,000 Required- a) Prepare the journal entry in the books of both companies, assuming both are publicly traded. b) Assuming now that Saman is a private company and that the fair value of building is the most reliable fair value, prepare the journal entry for Saman Co.
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