Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 10, Problem 10.12BE
Nonmonetary exchange
• LO10–6
Refer to the situation described in BE 10–11. Answer the questions assuming that the fair value of the equipment was $24,000, instead of $17,000.
BE 10–11
Nonmonetary exchange
• LO10–6
Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment were $20,000 (original cost of $65,000 less
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Exercise 10-17 (Algo) Nonmonetary exchange [LO10-6]
The Bronco Corporation exchanged land for equipment. The land had a book value of $122,000 and a fair value of $154,000. Bronco
received $12,000 from the owner of the equipment to complete the exchange which has commercial substance.
Required:
1. What is the fair value of the equipment?
2. Prepare the journal entry to record the exchange.
X Answer is not complete.
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Required 1
Required 2
What is the fair value of the equipment?
Fair value
2$
3,400 X
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Chapter 10 Solutions
Intermediate Accounting
Ch. 10 - Prob. 10.1QCh. 10 - Prob. 10.2QCh. 10 - Prob. 10.3QCh. 10 - Prob. 10.4QCh. 10 - Prob. 10.5QCh. 10 - Prob. 10.6QCh. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9QCh. 10 - What account is credited when a company receives...
Ch. 10 - Prob. 10.11QCh. 10 - Identify the two exceptions to valuing property,...Ch. 10 - In what situations is interest capitalized?Ch. 10 - Define average accumulated expenditures and...Ch. 10 - Explain the difference between the specific...Ch. 10 - Prob. 10.16QCh. 10 - Prob. 10.17QCh. 10 - Explain the accounting treatment of costs incurred...Ch. 10 - Explain the difference in the accounting treatment...Ch. 10 - Prob. 10.20QCh. 10 - Prob. 10.21QCh. 10 - Prob. 10.22QCh. 10 - Prob. 10.23QCh. 10 - Acquisition cost; machine LO101 Beavert on Lumber...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Asset retirement obligation LO101 Refer to the...Ch. 10 - Prob. 10.6BECh. 10 - Acquisition cost; noninterest-bearing note LO103...Ch. 10 - Prob. 10.8BECh. 10 - Fixed-asset turnover ratio LO105 Huebert...Ch. 10 - Fixed-asset turnover ratio; solve for unknown ...Ch. 10 - Prob. 10.11BECh. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Prob. 10.14BECh. 10 - Prob. 10.15BECh. 10 - Research and development LO108 Maxtor Technology...Ch. 10 - Prob. 10.17BECh. 10 - Research and development; various types LO108...Ch. 10 - Prob. 10.19BECh. 10 - Acquisition costs; land and building LO101 On...Ch. 10 - Acquisition cost; equipment LO101 Oaktree Company...Ch. 10 - Prob. 10.3ECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Intangibles LO101 In 2018, Bratten Fitness...Ch. 10 - Goodwill LO101 On March 31, 2018, Wolfson...Ch. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Acquisition costs; noninterest-bearing note ...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.16ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - FASB codification research LO101, LO106, LO107,...Ch. 10 - Prob. 10.22ECh. 10 - Interest capitalization LO107 On January 1, 2018,...Ch. 10 - Interest capitalization LO107 On January 1, 2018,...Ch. 10 - Interest capitalization; multiple periods LO107...Ch. 10 - Research and development LO108 In 2018, Space...Ch. 10 - Prob. 10.27ECh. 10 - IFRS; research and development LO108, LO109...Ch. 10 - IFRS; research and development LO109 IFRS NXS...Ch. 10 - Prob. 10.30ECh. 10 - Software development costs LO108 Early in 2018,...Ch. 10 - Prob. 10.32ECh. 10 - Intangibles; start-up costs LO101, LO108 Freitas...Ch. 10 - Prob. 10.34ECh. 10 - Prob. 10.1PCh. 10 - Prob. 10.2PCh. 10 - Prob. 10.3PCh. 10 - Prob. 10.4PCh. 10 - Acquisition costs; journal entries LO101, LO103,...Ch. 10 - Prob. 10.6PCh. 10 - Nonmonetary exchange LO106 On September 3, 2018,...Ch. 10 - Prob. 10.8PCh. 10 - Interest capitalization; specific interest method ...Ch. 10 - Prob. 10.10PCh. 10 - Research and development LO108 In 2018,...Ch. 10 - Prob. 10.12PCh. 10 - Judgment Case 101 Acquisition costs LO101, LO103,...Ch. 10 - Research Case 102 FASB codification; locate and...Ch. 10 - Judgment Case 103 Self-constructed assets LO107...Ch. 10 - Judgment Case 104 Interest capitalization LO107...Ch. 10 - Prob. 10.6BYPCh. 10 - Prob. 10.7BYPCh. 10 - Judgment Case 108 Research and development LO108...Ch. 10 - Prob. 10.9BYPCh. 10 - Prob. 10.11BYPCh. 10 - Ethics Case 1012 Research and development LO108...Ch. 10 - Prob. 10.13BYPCh. 10 - Prob. 10.14BYPCh. 10 - Prob. 10.15BYPCh. 10 - Prob. 10.16BYPCh. 10 - Continuing Cases Target Case LO101, LO105 Target...
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- Exercise 10-16 (Algo) Nonmonetary exchange (LO10-6] The Bronco Corporation exchanged land for equipment. The land had a book value of $129,000 and a fair value of $168,000. Bronco paid the owner of the equipment $19,000 to complete the exchange which has commercial substance. Required: 1. What is the fair value of the equipment? 2. Prepare the journal entry to record the exchange. * Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the fair value of the equipment? Fair value $ 178,000 X Required 2 >arrow_forwardExercise 10-17 (Algo) Nonmonetary exchange [LO10-6] The Bronco Corporation exchanged land for equipment. The land had a book value of $131,000 and a fair value of $172,000. Bronco received $21,000 from the owner of the equipment to complete the exchange which has commercial substance. Required: 1. What is the fair value of the equipment? 2. Prepare the journal entry to record the exchange. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 X Answer is not complete. Transaction 1 Equipment - new Land-old General Journal Cash Gain on exchange of assets < Required 1 Required 2 <*** Debit 193,000 X Credit 131,000 X 21,000 X 41,000arrow_forwardDo not give answer in imagearrow_forward
- 7arrow_forward4 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 $16,000 (original cost of $36,000 less accumulated depreciation of $20,000) and a fair yalue of $9,800. Kapono paid $28,000 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 $540,000 and a fair value of $780,000. Kapono paid $58,000 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 $22,000 instead of $9,800. 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…arrow_forwardE10-10 Exchange of Assets Use the same information as in E10-9, except that the warehouse owned by Denver has a fair value of $28,000, and therefore, Denver agrees to pay Bristol $2,000 to complete the exchange. Required: Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.arrow_forward
- a111111arrow_forwardExercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3] On January 1, 2021, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $41,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry to record the acquisition of the tractor. 2. How much interest expense will the company include in its 2021 and 2022 income statements for this note? 3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note? O Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Prepare the journal…arrow_forward32 Cedric Company recently traded in an older model of equipment for a new model. The old model's book value was $191,000 (original cost of $421,000 less $230,000 in accumulated depreciation) and its fair value was $180,000. Cedric paid $61,000 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. No 1 Transaction 1 Equipment - new Accumulated depreciation X Answer is not complete. General Journal Gain on exchange of assets Cash Equipment - old 33 X Debit 241,000 230,000 Credit 11,000 X 61,000 421,000arrow_forward
- P15-12 Lessee and lessor; lessee guaranteed residual value ●LO15-2, LO15-6 On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. • O • The equipment cost Ghosh $956,000 and has an expected useful life of five years. Ghosh expects the residual value at December 31, 2027, will be $300,000. Negotiations led to the lessee guaranteeing a $340,000 residual value. Equal payments under the finance/sales-type lease are $200,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Karrier is aware that Ghosh used a 5% interest rate when calculating lease payments. Required: 1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease.arrow_forward03:42:34 Brief Exercise 7-18 (Algo) Account for the exchange of long-term assets (LO7-6) China Inn and Midwest Chicken exchanged assets. China Inn received delivery equipment and gave restaurant equipment. The fair value and book value of the restaurant equipment were $24,000 and $15,600 (original cost of $43,000 less accumulated depreciation of $27,400), respectively. To equalize market values of the exchanged assets, China Inn paid $7,900 in cash to Midwest Chicken. Record the gain or loss for China Inn on the exchange of the equipment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) No 1 Transaction 1 Equipment (Delivery) Equipment (Restaurant) Cash Gain Answer is not complete. General Journal 3000 Debit 15,600 7,900X 8,400 Credit 24,000arrow_forwardACCT 102arrow_forward
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