Sand Corp exchanged equip used in its operations and pay $2,000 cash to Dake Corp for similiar equip used and its operations. The following is true: FMV of equip given up by Sand Corp is $13,500 (for Dake its $15,500) Cost of equip given up for Sand corp and Dake is $28,000; Accumulated Depr for Sand Corp is $19,000 (for Dake is $10,000) If there is no commercial substance, is the basis for the new asset received by Dake higher, lower or the same as compared to when there was commercial substance?

Q: Garcia Co. owns equipment that costs $77,300, with accumulated depreciation of $42,800. Garcia sells…

A: Net book value of the equipment = Cost - accumulated depreciation = $77,300 - $42,800 = $34,500…

Q: In December of 20x4, Atlas Chemical Corporation sold a forklift for $18,300. The machine was…

A: Salvage  Value net of tax is that amount which includes the tax payable / tax saving on profit on…

Q: Firm OCS sold business equipment with a $23,000 initial cost basis and $10,015 accumulated tax…

A: calculation of recaptured ordinary income and Section 1231 gain or loss on the sale are as follows

Q: Hanson Ltd provides consulting services to The Bowen Ltd. Rather than paying in cash, it is agreed…

A: When customer promises to pay consideration other than in cash form , then entity should measure its…

Q: BBB,Inc sells its unprofitable division A at a gain of $20,000. Before the sale, division A had a…

A: We know that continuing operations means the operating activities of the company which it undertakes…

Q: A truck costs $82,000 when new and has accumulated depreciation of $70,000. Suppose Frank Towing…

A: First we need to calculate the current value of old truck.Then it will be added to cash payment  to…

Q: Firm

A:

Q: Sansoni Services exchanged an asset with cost of $20,000 (now 30% depreciated) for a similar asset…

A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…

Q: Konopelski Corporation purchased McKenzie Company 3 years ago and at that time recorded goodwill of…

A: Goodwill is an intangible asset related to the acquisition of one organization via way of means of…

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

A: This question is related to non-monetary exchange Accounting for non-monetary interactions,…

Q: Toni Skysong Inc. has the folowing amountS reported in its general ledger at the end or the current…

A: Intangible assets are those assets which can not be seen or touched but are related to business such…

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

A: Formulas:

Q: 11.  Sand Corp exchanged equip used in its operations and pay $2,000 cash to Dake Corp for similiar…

A: A commercial substance means that due to the transaction future cash flow of a business changes.

Q: Java Dreams shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is…

A: Goodwill = Amount paid for purchase of business - (Fair value of assets - Book value of liabilities)…

Q: A truck costs $105,000 when new and has accumulated depreciation of $100,000. Suppose Jackson Towing…

A: Cost of truck = $105,000Accumulated Depreciation = $100,000Cash Paid = $46,000Market Value of New…

Q: me Corp. purchased Equipment for $20,000. At the end of the year, Acme recorded depreciation on the…

A: Operating expenses :             The operating expenses are the expenses incurred during the…

Q: Garcia Co. owns equipment that costs $76,800, with accumulated depreciation of $40,800. Garcia sells…

A: Gain (Loss) on Sale of Equipment = Sale Consideration - (Cost - Accumulated Depreciation)

Q: TX, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that TX purchased…

A: Goodwill is an intangible asset that represents the excess of the purchase price of a business over…

Q: any owns trade name that was in an acquis pany. $3,700,000, but according to IFRS, it must be…

A: Estimated Fair Value = Estimated Cash Flows x PVAF (8%, 8years)                                 =…

Q: nge an old equipment for a new equipment.The cost and accumulated depreciation of the old equipment…

A: The adjusted net asset method is a business valuation strategy that modifies a company's reported…

Q: Sand Corp exchanged equip used in its operations and pay $2,000 cash to Dake Corp for similiar equip…

A: Commercial Substance: An exchange of assets has commercial substance when there is a change in the…

Q: 1. A special manufacturing and handling device was purchased by Alfonso Manufacturing for $200,000…

A: Net present value refers to the difference between the inflows and outflows of cash during a…

Q: Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four…

A: The question is based on the concept of Financial Accounting.

Q: Consider each of the following independent situations: a. GYT Co. exchanges a machine that cost…

A: It is a figure that represents the combined net income and other comprehensive income of a…

Q: OCD exchanged old realty for new like-kind realty. OCD’s adjusted basis in the old realty was…

A: a.When a assets are exchanged like-kind properties it a becomes nontaxable transaction and no gains…

Q: Information Processing, Inc. (IPI) exchanges its used machine for a new machine with Jerrod Business…

A: The acquisition of assets is a part of business activities. When the company disposes of the asset…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.