Why does Denver agree to pay $2,000 to Broncos? Prepare the necessary journal entry by Denver Company to record this transaction, assuming the exchange has A) Commercial Substance B) No Commercial Substance 3) Prepare the necessary journal entry by Broncos to record this transaction, assuming the exchange has A) Commercial Substance. B) No Commercial Substance
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On August 1, two independent companies, Denver and Broncos, each own a machine and they agree to an exchange. The following information is available: Denver Cost $90,000 Broncos cost $45,000
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- Two independent companies, Denver and Bristol, each own a warehouse, and they agree to exchange them. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $62,000 Accumulated depreciation 50,000 25,000 Fair value 47,000 45,000 Bristol agrees to pay Denver $2,000 to complete the exchange. Required: Assuming the transaction has commercial substance, prepare journal entries for Denver and Bristol to record the exchange. CHART OF ACCOUNTS Denver and Bristol General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Building (Warehouse (new)) 182 Building (Warehouse (old)) 185 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings Assume the exchange has commercial…Two independent companies, Denver and Bristol, each own a warehouse and Denver agrees to pay Bristol $2,000 to complete the exchange. On January 1, they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available: Denver Bristol Cost $90,000 $47,000 Accumulated depreciation 50,000 20,000 Fair value 35,000 37,000 Required: Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.wo independent companies, Denver and Bristol, each own a warehouse, and Denver agrees to pay Bristol $2,000 to complete the exchange. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $62,000 Accumulated depreciation 50,000 25,000 Fair value 43,000 45,000 Required: Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange. CHART OF ACCOUNTSDenver & BristolGeneral Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Building (Warehouse (new)) 182 Building (Warehouse (old)) 185 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings REVENUE 411 Sales Revenue 882 Gain on Exchange EXPENSES 500…
- Two independent companies, Denver and Bristol, each own a warehouse. On January 1, they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $63,000 Accumulated depreciation 50,000 25,000 Fair value 48,000 46,000 Bristol agrees to pay Denver $2,000 to complete the exchange. Required: Assuming the transaction has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.Mott Company purchases a machine from Janelle Company. Installation of the machine requires specialized knowledge that Mott Company does not possess. Janelle Company regularly includes installation as part of its sales contracts. The machine has a stand-alone price of $50,000, and the value of the installation is estimated to be $5,000. Mott agrees to purchase the machine for $50,000. How much of the contract price should be allocated to the machine and installation respectively?Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000 (original cost of $28,000 less accumulated depreciation of $16,000) and a fair value of $9,000. Kapono paid $20,000 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. Repeat requirement 1 assuming that the fair value of the old tractor is $14,000 instead of $9,000.
- Kaohsiung company exchanges its old office equipment and $85,000 for new office equipment. The old office equipment has a book value of $36,000 and a fair value of $20,000 on the date of the exchange. If this transaction has commercial substance, the cost of the new office equipment would be recorded at a.$85,000. b.$121,000. c.$105,000. d.cannot be determined.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, Kalman would recognize a gain on this exchange in theamount ofa. $0b. $20,000c. $30,000d. $60,000 After the exchange, Harglo would record its newly acquired land on its books ata. $120,000b. $102,000c.…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, Kalman would recognize a gain on this exchange in theamount ofa. $0b. $20,000c. $30,000d. $60,000
- 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. 3. For financial reporting purposes, Harglo would recognize a gain on this exchange in the amount ofa. $0b. $6,000c. $10,000d. $40,000 4. For financial reporting purposes, Kalman would recognize a gain on this exchange…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. $166,000Cardinals and the Rams are engaged in a nonmonetary exchange. Specifically, they will exchange their office buildings with each other. The transaction is structured as the following: Cardinals will give Rams its office building a fair market value of $13,000,000 (the original cost of the building is $5,800,000 and the accumulated depreciation on the building is $1,600,000). Rams will transfer their office building to the Cardinals. The original cost of Rams office building is $6,500,000 and the accumulated depreciation on the building is $740,000. In addition to exchanging the buildings, Rams also agrees to pay Cardinals $1,200,000 in cash and transfer 100 popcorn machines with a fair value of $100,000 (original cost of the 100 popcorn machines is $200,000 and the accumulated depreciation is $75,000). Cardinals and Rams record buildings and machines in separate accounts. 1.) prepare the journal entry to record the exchange for the CARDINALS 2.) prepare the journal entry to record…