This topic is about Property, Plant, and Equipment Based on the problem,What is the cost of the machine acquired in the exchange? How much is the gain on the exchange? During the year, May P. Rah Co. exchanged an old packing machine, whichcost Php1,200,000 and was 50% depreciated, for another used machineand paid a cash difference of Php160,000The fair value of the old packing machine was determined to be Php700,000

In case of exchange of one asset with another asset, fair value of the asset is consideted for…

Answered: This topic is about Property, Plant,…

This topic is about Property, Plant, and Equipment Based on the problem, What is the cost of the machine acquired in the exchange? How much is the gain on the exchange?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

In December 2005, SHOWEE Company exchanged an old machine, with a cost P6,000,000 and 50% depreciated, for a dissimilar used machine and paid a cash difference of P1,500,000. The fair value of the old machine was determined to be P2,000,000. SHOWEE should record the machine at 6,000,000 3,500,000 3,000,000 2,000,000
In December 202, Angelyn Company exchanged an old machine, costing P3,000,000 and 50% depreciated, for a used machine and paid a cash difference of P500,000. The fair value of the old machine was determined to be P1,800,000. Angelyn Company should record the machine at
On March 1, 2022, True Company exchanged an old machine which cost P 1,200,000 and was 50% depreciated, for another used machine and paid a cash difference of P 160,000. The fair value of the old machine was determined to be P 700,000. Prepare the journal entry to record the exchange:
A delivery truck that cost $26,000 has been owned for 3 years and is traded in for another delivery truck to be used for a similar purpose. Depreciation in the amount of $5,200 has been taken each year-a total of $15,600. If the trade-in value of the old truck is $12,000 and the new truck has a fair market value of $30,000, the new truck would be recorded at a. $30,000. Ob. $12,000. Oc. $29,400. Od. $10,400.
Liam acquired a machinery purchased for P 1,100,000.00 and paid for transportation charge of P 74,955.00. To install the machine in his plant, he paid installation charges amounting P35,000.00. Scrap value will be P150,000.00 and the useful life of machinery is 12 years. Charge depreciation with the Straight Line Method of depreciation. What is annual depreciation cost of the equipment in pesos?
During the current year, Benguet Company purchased a secondhand machine at a price of P300,000. A cash down payment of P50,000 was made and a two-year, non interest bearing note was issued for the balance. Recent transactions involving similar machinery indicate that the used machine has a secondhand market value of P240,000. A new machine would cost P400,000. The following costs were incurred on the machine during the year: Cost of removing the old machine 2,000Cash proceeds form the sale of the old machine 1,200Cost of spare parts purchased and set aside from breakdowns during the first two years of normal use of the machine 20,000Cost of labor to install the machine 4,000Cost of testing the machine prior to use 1,800Cost of hauling the machine from the vendor’s place of business to the company’s premises 5,000Cost of repairing the damage to the machine when it was dropped during the installation 3,000Repairs incurred during the first year of operations 6,000Safety devices added to…
Jamela Company acquired a welding machine with an invoice price of P5,000,000 subject to a cash discount of 10% which was not taken. Jamela Company incurred freight and insurance during shipment of P50,000 and testing and installation cost of P150,000. Jamela Company also incurred cost of P20,000 in removing the old welding machine prior to the installation of the new one. Welding supplies were acquired at a cost of P80,000. What is the cost of the new welding machine?
West Co. paid $50,000 for an intangible asset other than goodwill. Fair value of the asset is $55,000. West signed a contract to sell the asset for $10,000 in 10 years. What amount of amortization expense should West record each year? A. B. C. D. $5,500 $5,000 $4,500 $4,000
Willis Company trades in a printing press for a newer model. The cost of the old printing press was $62,000, and accumulated depreciation up to the date of the trade - in is $46,000. The company also pays $45,000 cash for the newer printing press. The fair market value of the newer printing press is $70,000. The journal entry to acquire the new printing press will required a debit to Printing Press for: A. $45,000 B. $108,000. C. $70,000. D. $62,000
During the current year, Hitchcock Developers disposed of plant assets in the following transactions. Feb. 10 office equipment costing $24,000 was given to a scrap dealer at no charge. At the date of disposal, accumulated depreciation on the office equipment amounted to $21,800. Apr. 1 Hitchcock sold land and building to Claypool Associates for $900,000, receiving $100,000 cash and 5 years, 9 percent note receivables for the remaining balance. Hitchcock’s records showed the following amount: Land, $50,000; building, $550,000; accumulated depreciation: building (at the date of disposal), $250,000 Aug. 15 Hitchcock traded in an old truck for a new one. The old truck had cost $26,000, and its accumulated depreciation amounted to $18,000. The list price the new truck was $39,000, but Hitchcock received a $10,000 trade in allowance for the old truck and paid $28,000 in cash. Hitchcock includes trucks in its Vehicles account. Oct. 1 Hitchcock traded in its old computer system as part of the…
During the current year, Ramirez Developers disposed of plant assets in the following transactions:Feb. 10 Office equipment costing $26,000 was given to a scrap dealer at no charge. At the dateof disposal, accumulated depreciation on the office equipment amounted to $25,800.Apr. 1 Ramirez sold land and a building to Claypool Associates for $900,000, receiving$100,000 cash and a five-year, 9 percent note receivable for the remaining balance.Ramirez’s records showed the following amounts: Land, $50,000; Building, $550,000;Accumulated Depreciation: Building (at the date of disposal), $250,000.Aug. 15 Ramirez traded in an old truck for a new one. The old truck had cost $26,000, and itsaccumulated depreciation amounted to $18,000. The list price of the new truck was$39,000, but Ramirez received a $10,000 trade-in allowance for the old truck and paidonly $29,000 in cash. Ramirez includes trucks in its Vehicles account.Oct. 1 Ramirez traded in its old computer system as part of the purchase…
JJ Corp. purchased a new machine with an estimated useful life of 5 years with no salvage value of P 45,000. The machine is expected to produce cash flow from operations, net of income taxes, as follows: 1st year P 9,000 4th year P 9,000 2nd year 12,000 5th year 8,000 3rd year 15,000 JJ will use the sum-of-the-years’ digit method of depreciate the new machine in its accounting records as follows: 1st year P15,000 4th year P 6,000 2nd year 12,000 5th year 3,000 3rd year 9,000 What is the payback period?