USE THE FOLLOWING INFORMATION:The following information regarding the exchange is available:Motown Corporation trades in a delivery vehicle for a new delivery vehicle. Assume the transaction has commercial substance.Cost of Motown's vehicle (old)$59,000Accumulated Depreciation - Motown's vehicle (old)$2,200Fair value Motown's vehicle (old)$39,000List price of new vehicle (new)$61,000Trade in allowance for Motown's vehicle (old)$38,00026.) Compute the basis of the new vehicle to be recorded on Motown's books.

To compute the basis of the new vehicle to be recorded on Motown's books, we need to consider the…

Answered: USE THE FOLLOWING INFORMATION: The…

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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Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $95,239. The Focus Company initially offered to buy the land for $108,852. The companies settled on a purchase price of $212,000. On the same day, another piece of land on the same block sold for $102,714. Under the cost principle, at what amount should the land be recorded in the accounting records of Focus Company? a.$102,714 b.$95,239 c.$212,000 d.$108,852
Required information [The following information applies to the questions displayed below.] Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $13,500 (original cost of $31,000 less accumulated depreciation of $17,500) and a fair value of $9,300. Kapono paid $23,000 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 $515,000 and a fair value of $730,000. Kapono paid $53,000 cash to complete the exchange. The exchange has commercial substance. Required: 1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor? 2. Assume the fair value of the old tractor is $17,000 instead of $9,300. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor? Complete this question by entering…
On January 2, 2020, Coronado Industries traded in an old delivery truck for a newer model. The exchange lacked commercial substance. Data relative to the old and new trucks follow: Old Truck Original cost Accumulated depreciation as of January 2, 2020 $69000 34500 Average published retail value New Truck List price 15300 $75700 Cash price without trade-in 66800 Cash paid with trade-in 56500 What should be the cost of the new truck for financial accounting purposes? O $91000. O $75700. O $56500. O $66800.
Larkspur Ltd. traded a used truck (cost $30,200, accumulated depreciation $27,180, fair value $1,950) for a new truck. Larkspur did look up the value of its used truck and determined its fair value at the date of the trade is $1,950. The list price of the new truck is $35,700 and the trade-in allowance given on the trade was $4,970. If Larkspur paid $30,730, what should be the amount used as the cost of the new truck? The cost of the new truck $ Prepare Larkspur's entry to record the exchange. (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.) Account Titles and Explanation Debit Credit NOO
A company recently traded in an older model of equipment for a new model. The old model's book value was $216,000 (original cost of $476,000 less $260,000 in accumulated depreciation) and its fair value was $240,000. The company paid $64,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet
Sheffield Corp. traded in a manual pressing machine for an automated pressing machine and gave $46500 cash. The old machine cost $478000 and had a net book value of $343000. The old machine had a fair value of $310000.Which of the following is the correct journal entry to record the exchange assuming commercial substance? Equipment 659500 Accumulated Depreciation 135000 Equipment 478000 Cash 46500 Equipment 356500 Equipment 310000 Cash 46500 Equipment 356500 Loss on Disposal 33000 Accumulated Depreciation 135000 Equipment 478000 Cash 46500 Cash 46500 Equipment 310000 Loss on Disposal 33000 Accumulated Depreciation 135000 Equipment 524500
Bramble Company purchased an electric wax melter on April 30, 2025, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter Cash paid Cost of old melter (5-year life, $800 salvage value) Accumulated depreciation-old melter (straight-line) Secondhand fair value of old melter $20,200 No. Account Titles and Explanation (a) Exchange has commercial substance: 12,800 14,300 8,100 6,700 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Bramble's fiscal year ends on December 31, and depreciation has been recorded through December 31, 2024. (Credit account titles are automatically indented when 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.) Debit Credit
Required information [The following information applies to the questions displayed below] Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $20,500 (original cost of $45,000 less accumulated depreciation of $24,500) and a fair value of $10,700. Kapono paid $37,000 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 $585,000 and a fair value of $870,000. Kapono paid $67,000 cash to complete the exchange. The exchange has commercial substance. Required: 1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 2. Assume the fair value of the farmland given is $468,000 instead of $870,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 3. Assume the same facts as…
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Rain Company traded a manual weather machine for an automated weather machine and gave $40,000 cash. The manual machine cost $495,000, had a net book value of $350,000, and a fair value of $360,000. The automated machine was originally purchased by Shine Company for $510,000 and had a net book value of $430,000. It has a fair market value of $450,000. Determine the value of the asset received for Rain and Shine assuming the exchange does not have commercial substance. Please include the appropriate dollar sign and commas (example $25,000).
Required information [The following information applies to the questions displayed below.] Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $15,000 (original cost of $34,000 less accumulated depreciation of $19,000) and a fair value of $9,600. Kapono paid $26,000 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 $530,000 and a fair value of $760,000. Kapono paid $56,000 cash to complete the exchange. The exchange has commercial substance. 1. What is the amount of gain or loss that Kapono would recognize on the exchange of the land? 2. Assume the fair value of the farmland given is $424,000 instead of $760,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 3. Assume the same facts as Requirement 1 and that the exchange lacked…
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