(To record exchange of the equipment.)(b) Exchange lacks commercial substance:Depreciation ExpenseAccumulated Depreciation-Equipment(To record current depreciation.)Equipment95519,100Accumulated Depreciation-Equipment26,900Gain on Disposal of EquipmentEquipmentCash(To record exchange of the equipment.)095534,40011,600 Swifty Company purchased an electric press on June 30, 2025, by trading in its old gas model and paying the balance in cash. Thefollowing data relate to the purchase: \table[[List price of new press, $25, 100

Part 2:Explanation:Step 1:To record the exchange of the equipment, we need to recognize any gain or…

Answered: (To record exchange of the equipment.)…

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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Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.
Q7.4 Revaluation of Long-Lived Assets
Depreciation: A. Measures the decline in market value of an asset.B. Measures physical deterioration of an asset.C. Is the process of allocating to expense the cost of an item of property, plant and equipment.D. Is an outflow of cash from the use of an item of property, plant and equipment.E. Is applied to land.
Which of the following statements concerning Intangible assets are TRUE?(In your answer, provide the appropriate letter(s) A – E for each statement believed to be true)A. Goodwill can never be recognisedB. Only purchased intangibles can be recognisedC. Intangibles are amortised over their useful life where the life is finiteD. Research expenditure is expensedE. A brand name may be recognised when one business acquires another
Riverbed Corporation exchanged equipment used in its manufacturing operations for equipment used in the operations of Marin Ltd. The following information pertains to the exchange: Riverbed Corp. Marin Ltd. $84,200 $84,200 Equipment (cost) Accumulated depreciation 46,700 40,600 Fair value of old equipment 42,200 43,500 Cash given up 1,300 Both companies agreed that the exchange did not have commercial substance. Prepare the necessary journal entries to record the asset exchange on the books of both companies. (Credit account titles are automatically indented when the amount is entered. Do r indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Riverbed Corporation: Account Titles and Explanation Debit Credit
An international financial reporting standard concerning depreciation states that: 1. The straight-line method should be used to depreciate all tangible non-current assets. 2. The reducing-balance method should be used to depreciate all intangible non-current assets. Are the above statements true or false? A. B. C. D. Statement 1 False False True True Statement 2 True False False True
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Domestic
A fixed asset with a cost of $24,737 and accumulated depreciation of $22,263 is traded for a similar asset priced at $60,057 (fair market value) in a transaction with a commercial substance. Assuming a trade-in allowance of $4,264, at what cost will the new equipment be recorded in the books? a.$4,264 b.$1,790 c.$60,057 d.$20,473
Which of the following is a false statement about depreciation? It has no impact on cash It represents the physical deterioration of an asset It exists because of the matching principle Accelerated methods of calculating depreciation are acceptable under GAAP
In Able Company’s efforts to estimate a value for Baker Company's goodwill, Able is estimating Baker Company's expected future earnings. Able is using Baker's past earnings to project the future earnings. Which of the following items should be eliminated from Baker's past earnings in order to project future earnings? Extraordinary items Amortization expense for identifiable intangibles a. Yes Nob. Yes Yesc. No Yesd. No No
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