The Bronco Corporation exchanged land for equipment. The land had a book value of $136,000 and a fair value of $182,000. Bronco paid the owner of the equipment $26,000 to complete the exchange which has commercial substance. Required: 1. What is the fair value of the equipment? 2. Prepare the journal entry to record the exchange. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the fair value of the equipment? Fair value < Required 1 Required 2 >

The Bronco Corporation exchanged land for equipment. The land had a book value of $136,000 and a fair value of $182,000. Bronco paid the owner of the equipment $26,000 to complete the exchange which has commercial substance. Required: 1. What is the fair value of the equipment? 2. Prepare the journal entry to record the exchange. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the fair value of the equipment? Fair value < Required 1 Required 2 >

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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! Required information [The following information applies to the questions displayed below.] The following information relates to the intangible assets of Lettuce Express: a. On January 1, 2021, Lettuce Express completed the purchase of Farmers Produce, Ic., for $1,590,000 in cash. The fair value of the identifiable net assets of Farmers Produce was $1,431,000. b. Included in the assets purchased from Farmers Produce was a patent for a method of processing lettuce valued at $54,000. The original legal life of the patent was 20 years. There are still 17 years left on the patent, but Lettuce Express estimates the patent will be useful for only 10 more years. c. Lettuce Express acquired a franchise on July 1, 2021, by paying an initial franchise fee of $187,600. The contractual life of the franchise is seven years. 2. Prepare the intangible asset section of the December 31, 2021, balance sheet. LETTUCE EXPRESS Balance Sheet December 31, 2021 (Intangible Assets Section) Intangible Assets…
China Inn and Midwest Chicken exchanged assets. Midwest Chicken received restaurant equipment and gave delivery equipment. The fair value and book value of the delivery equipment given were $25,000 and $28,000 (original cost of $33,000 less accumulated depreciation of $5,000), respectively. To equalize market values of the exchanged assets, Midwest Chicken received $8,000 in cash from China Inn. Record the gain or loss for Midwest Chicken on the exchange of the equipment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Several example scenarios in relation to rebates are provided below. Show the accounting impact of these transactions. That is, show how would the income statement and balance sheet look after each of these transactions. They are not cumulative. Assume that a company has the following income statement and balance sheet at the start of June 2017. c The company purchases a TV for $100, and receives a rebate for $30. The TV is not sold. The O&A rebate relates to marketing.
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Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $16,500 (original cost of $37,000 less accumulated depreciation of $20,500) and a fair value of $9,900. Kapono paid $29,000 cash to complete the exchange. The exchange has commercial substance. Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $545,000 and a fair value of $790,000. Kapono paid $59,000 cash to complete the exchange. The exchange has commercial substance. Required: What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the fair value of the farmland given is $436,000 instead of $790,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that…
Bonnie Inc. and Clyde Company have an exchange with no commercial substance. The asset given up by Bonnie has a book value of $120,000 and a fair value of $135,000. The asset given up by Clyde has a book value of $220,000 and a fair value of $200,000. Boot (cash) of $65,000 is received by Clyde. What amount should Bonnie record for the asset received?
Equipment that cost $1,400,000 and has accumulated depreciation of $600,000 is exchanged for equipment with a fair value of $960,000 and $40,000 cash is paid. The exchange has commercial substance. The gain to be recognized from the exchange is
'he Bronco Corporation exchanged land for equipment. The land had a book value of $122,000 and a fair alue of $154,000. Bronco paid the owner of the equipment $12,000 to complete the exchange which has ommercial substance. Show the entry with loss or gain on exchange
9 On July 1, 2021, JULIA exchanged its non-monetary asset (equipment) with GERALD’s non-monetary asset (machinery). The following data were made available: JULIA: Equipment P4,400,000 Accumulated depreciation 2,000,000 Cash received from Gerald 500,000 GERALD: Machinery P3,700,000 Accumulated depreciation 1,800,000 Cash paid to Julia 500,000 The transaction lacks commercial substance. How much is cost of the new asset of JULIA?
Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract of land being held for development, but each company would prefer to build on the other's land. Accordingly, they agree to exchange their land, and have the following information: Harglo's Kalman's Land Land Cost and book value $150,000 $100,000Fair value based upon appraisal $200,000 $160,000 The exchange of land was made, and, based on the difference in appraised fair value, Kalman paid $40,000 cash to Harglo. For financial reporting purposes, Harglo would recognize a gain on this exchange in the amount of $6,000 After the exchange, Harglo would record its newly acquired land on its books ata. $120,000b. $102,000c. $136,000d. $166,000
Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $520,000 and a fair value of $740,000. Kapono paid $54,000 cash to complete the exchange. The exchange has commercial substance. Required: What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that…
Alvarez and Reymond, both NGAs, exchanged their equipment. Relevant data is presented below Alvarez Reymond Carrying amount 85,000 130,000 Fair value 95,000 115,000 Cash paid by Alvarez to Reymond 15,000 How much is the initial measurement of the equipment received by Reymond if the exchange has a commercial substance? Refer to the previous question, how much is the gain (loss) recognized by Reymond?