Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 10, Problem 10.13BE
Nonmonetary exchange
• LO10–6
Refer to the situation described in BE 10–11. Answer the questions assuming that the exchange lacks commercial substance.
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
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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 $12,000 from the owner of the equipment to complete the exchange which has commercial substance.
Required:
1. What is the fair value of the equipment?
2. Prepare the journal entry to record the exchange.
X Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
What is the fair value of the equipment?
Fair value
2$
3,400 X
Required 2 >
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 >
Exercise 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
41,000
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...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- ACCT 102arrow_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_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_forward
- Pls answer number 13 with solutions In 20x1, EXHAUSTIVE COMPLETE Co. received a court order requiring the cleanup of environmental damages caused by one of EXHAUSTIVE’s factory. EXHAUSTIVE has no other realistic alternative but to comply with the court order. Other entities have incurred around ₱60M for similar cleanup; however, EXHAUSTIVE’s best estimate of the cost of cleanup is ₱80M. How much is the provision to be recognized? a. 60M c. 70M b. 80M d. 0arrow_forwardE 10-9 Acquisition cost; noninterest-bearing note LO3 On January 1, 2013, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a noninterest-bearing note requiring $25,000 to be paid on December 31, 2015. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company's financial year-end is December 31. Required: 1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar. 2. How much interest expense will the company include in its 2013 and 2014 income statements for this note? 3. What is the amount of the liability the company will report in its 2013 and 2014 statements of financial position for this note?arrow_forwardExercise 10-5 (Algo) Intangibles [LO10-1] In 2021, Bratten Fitness Company made the following cash purchases: 1. The exclusive right to manufacture and sell the X-Core workout equipment from Symmetry Corporation for $211,000. Symmetry created the unique design for the equipment. Bratten also paid an additional $15,500 in legal and filing fees to attorneys to complete the transaction. 2. An initial fee of $300,000 for a three-year agreement with Silver's Gym to use its name for a new facility in the local area. Silver's Gym has locations throughout the country. Bratten is required to pay an additional fee of $6,1Q0 for each month it operates under the Silver's Gym name, with payments beginning in March 2021. Bratten also purchased $411,000 of exercise equipment to be placed in the new facility. 3. The exclusive right to sell Healthy Choice, a book authored by Kent Patterson, for $30,000. The book includes healthy recipes, recommendations for dietary supplements, and natural remedies.…arrow_forward
- Question 11 of 11 - 17 : Pina Colada Company exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $31,300 (cost $61,300 less accumulated depreciation $30,000). Its fair value is $41,500, and cash of $6,700 is paid. Prepare the entry to record the exchange. (List all debit entries before credit entries. 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. Include in your journal entry separate account entries for both the new and old equipment.) Account Titles and Explanation Debit Creditarrow_forwardPA12. LO 11.5 Garcia Co. owns equipment that costs $76,800, with accumulated depreciation of $40,800. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $47,000 cash B. $36,000 cash C. $31,000 casharrow_forwardP15-12 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_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Property, Plant and Equipment (PP&E) - Introduction to PPE; Author: Gleim Accounting;https://www.youtube.com/watch?v=e_Hx-e-h9M4;License: Standard Youtube License