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Scenario 1 Scenario 2

Scenario 1 Scenario 2

FINANCIAL ACCOUNTING
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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Scenario 1 Scenario 2
Transcribed Image Text:Scenario 1 Scenario 2
Whispering is a cologne retailer. During 2023, Whispering had the following non-monetary transactions. Scenario 1: Whispering exchanged 4,800 of its common shares (FMV of $10 each) for equipment with a FMV of $52,800. Scenario 2: Whispering traded machinery with a cost of $13,700 and accumulated depreciation of $5,480 for a piece of inventory management equipment owned by Francis Inc.. The equipment is expected to help increase the speed with which Whispering fills its orders. An additional $3,100 was paid by Whispering in the exchange. The inventory management equipment has a cost of $21,100 and accumulated depreciation of $12,660 on Francis' accounting records. Fair values for the machinery and the inventory management equipment are $9,320 and $12,420 respectively. For each of the above independent scenarios, prepare the journal entry necessary to record the transaction, assuming that Whispering follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
Transcribed Image Text:Whispering is a cologne retailer. During 2023, Whispering had the following non-monetary transactions. Scenario 1: Whispering exchanged 4,800 of its common shares (FMV of $10 each) for equipment with a FMV of $52,800. Scenario 2: Whispering traded machinery with a cost of $13,700 and accumulated depreciation of $5,480 for a piece of inventory management equipment owned by Francis Inc.. The equipment is expected to help increase the speed with which Whispering fills its orders. An additional $3,100 was paid by Whispering in the exchange. The inventory management equipment has a cost of $21,100 and accumulated depreciation of $12,660 on Francis' accounting records. Fair values for the machinery and the inventory management equipment are $9,320 and $12,420 respectively. For each of the above independent scenarios, prepare the journal entry necessary to record the transaction, assuming that Whispering follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
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