The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel located farther from residential areas. Tinsley carried the land at its original cost of $68,750. According to an independent appraisal, the land currently is worth $165,000. Tinsley paid $24,000 in cash to complete the transaction. Required: 1. What is the fair value of the new parcel of land received by Tinsley assuming the exchange has commercial substance? 2. Prepare the journal entry to record the exchange assuming the exchange has commercial substance. 3. Prepare the journal entry to record the exchange assuming the exchange lacks commercial substance. 4. Prepare the journal entry to record the exchange except that Tinsley received $33,000 in the exchange, and the exchange lacks commercial substance. Complete this question by entering your answers in the tabs below.
The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel located farther from residential areas. Tinsley carried the land at its original cost of $68,750. According to an independent appraisal, the land currently is worth $165,000. Tinsley paid $24,000 in cash to complete the transaction. Required: 1. What is the fair value of the new parcel of land received by Tinsley assuming the exchange has commercial substance? 2. Prepare the journal entry to record the exchange assuming the exchange has commercial substance. 3. Prepare the journal entry to record the exchange assuming the exchange lacks commercial substance. 4. Prepare the journal entry to record the exchange except that Tinsley received $33,000 in the exchange, and the exchange lacks commercial substance. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel located farther
from residential areas. Tinsley carried the land at its original cost of $68,750. According to an independent appraisal, the land currently
is worth $165,000. Tinsley paid $24,000 in cash to complete the transaction.
Required:
1. What is the fair value of the new parcel of land received by Tinsley assuming the exchange has commercial substance?
2. Prepare the journal entry to record the exchange assuming the exchange has commercial substance.
3. Prepare the journal entry to record the exchange assuming the exchange lacks commercial substance.
4. Prepare the journal entry to record the exchange except that Tinsley received $33,000 in the exchange, and the exchange lacks
commercial substance.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 and 3
Prepare the journal entry to record the exchange except that Tinsley received $33,000 in the exchange, and the exchange lacks
commercial substance.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations.
View transaction list
1
Journal entry worksheet
Req 4
Record the exchange except that Tinsley received $33,000 in the exchange,
and the exchange lacks commercial substance.
Note: Enter debits before credits.
Transaction
1
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
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