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yvey Co. Equipment (cost)           Rwf 40,000              Rwf 40,000 Accumulated depreciation                31,000                     22,000 Fair value of equipment        24,500                     27,500 Cash given up                        3,000

yvey Co. Equipment (cost)           Rwf 40,000              Rwf 40,000 Accumulated depreciation                31,000                     22,000 Fair value of equipment        24,500                     27,500 Cash given up                        3,000

FINANCIAL ACCOUNTING
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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Bossie Company exchanged equipment used in its manufacturing operations plus Rwf 3,000 in cash for similar equipment used in the operations of Veryvey Company. The following information pertains to the exchange.

Bossie Co.                 Veryvey Co.

Equipment (cost)           Rwf 40,000              Rwf 40,000

Accumulated depreciation                31,000                     22,000

Fair value of equipment        24,500                     27,500

Cash given up                        3,000

Required:

  1. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
  2. State any four indicators of impairment as outlined by IAS 36: Impairment of Assets.

 

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