Nonmonetary Exchange Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange. Exchange has commercial substance: If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows , then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value. Exchange lacks commercial substance: If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset. To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Question

Want to see the full answer?

Answer 1

Question

Chapter 10, Problem 10.8P

Case A (Requirement (1))

To determine

Nonmonetary Exchange

Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange.

Exchange has commercial substance:

If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows, then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value.

Exchange lacks commercial substance:

If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset.

To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Case A Requirement (2)

To determine

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

Case B (Requirement (1))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

Case B (Requirement (2))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

Case B (Requirement (3))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

E3-17 (Algo) Calculating Equivalent Units, Unit Costs, and Cost Assigned (Weighted-Average Method) [LO 3-2] Vista Vacuum Company has the following production Information for the month of March. All materials are added at the beginning of the manufacturing process. Units . • Beginning Inventory of 3,500 units that are 100 percent complete for materials and 28 percent complete for conversion. 14,600 units started during the period. Ending Inventory of 4,200 units that are 14 percent complete for conversion. Manufacturing Costs Beginning Inventory was $20,500 ($10,100 materials and $10,400 conversion costs). Costs added during the month were $28,400 for materials and $51,500 for conversion ($26.700 labor and $24,800 applied overhead). Assume the company uses Weighted-Average Method. Required: 1. Calculate the number of equivalent units of production for materials and conversion for March. 2. Calculate the cost per equivalent unit for materials and conversion for March. 3. Determine the…

None

Accounting question

Answer 2

Question

Chapter 10, Problem 10.8P

Case A (Requirement (1))

To determine

Nonmonetary Exchange

Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange.

Exchange has commercial substance:

If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows, then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value.

Exchange lacks commercial substance:

If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset.

To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Case A Requirement (2)

To determine

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

Case B (Requirement (1))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

Case B (Requirement (2))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

Case B (Requirement (3))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 10, Problem 10.8P

Case A (Requirement (1))

To determine

Nonmonetary Exchange

Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange.

Exchange has commercial substance:

If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows, then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value.

Exchange lacks commercial substance:

If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset.

To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Case A Requirement (2)

To determine

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

Case B (Requirement (1))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

Case B (Requirement (2))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

Case B (Requirement (3))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 10, Problem 10.8P

Case A (Requirement (1))

To determine

Nonmonetary Exchange

Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange.

Exchange has commercial substance:

If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows, then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value.

Exchange lacks commercial substance:

If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset.

To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Case A Requirement (2)

To determine

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

Case B (Requirement (1))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

Case B (Requirement (2))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

Case B (Requirement (3))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 10, Problem 10.8P

Case A (Requirement (1))

To determine

Nonmonetary Exchange

Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange.

Exchange has commercial substance:

If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows, then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value.

Exchange lacks commercial substance:

If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset.

To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Case A Requirement (2)

To determine

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

Case B (Requirement (1))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

Case B (Requirement (2))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

Case B (Requirement (3))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Answer 6

Chapter 10, Problem 10.8P

Case A (Requirement (1))

To determine

Nonmonetary Exchange

Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange.

Exchange has commercial substance:

If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows, then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value.

Exchange lacks commercial substance:

If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset.

To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Answer 7

Chapter 10, Problem 10.8P

Case A (Requirement (1))

To determine

Nonmonetary Exchange

Exchange of non-monetary assets for another non-monetary asset is known as nonmonetary exchange.

Exchange has commercial substance:

If an exchange (Example: exchange of land for another non-monetary asset other than land) is likely to have a change in the future cash flows, then it is known as exchange has commercial substance. In this case, an exchange of non-monetary assets, which have commercial substance, is recorded at its fair value, and then resulted gain or loss must be recognized by determining the difference between the fair value and book value.

Exchange lacks commercial substance:

If an exchange (Example: exchange of land for another land) is expected that it will not change the future cash flows, then such exchange is known as exchange lacks commercial substance. In this case, an exchange lacks commercial substance; therefore new non-monetary asset would be value at the book value of the old non-monetary asset.

To determine: The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor.

Answer 8

Case A Requirement (2)

To determine

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

Answer 9

Case A Requirement (2)

To determine

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

Answer 10

Case B (Requirement (1))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

Answer 11

Case B (Requirement (1))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

Answer 12

Case B (Requirement (2))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

Answer 13

Case B (Requirement (2))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

Answer 14

Case B (Requirement (3))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Answer 15

Case B (Requirement (3))

To determine

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 10 - Prob. 10.1Q Ch. 10 - Prob. 10.2Q Ch. 10 - Prob. 10.3Q Ch. 10 - Prob. 10.4Q Ch. 10 - Prob. 10.5Q Ch. 10 - Prob. 10.6Q Ch. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9Q Ch. 10 - What account is credited when a company receives...

The amount of gain or loss that K Farms would recognize on the exchange of tracker, and also determine the initial value of the new tractor (Assume, the fair value of the old tractor is $14,000).

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the new land.

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the fair value of the old land is $400,000).

The amount of gain or loss that K Farms would recognize on the exchange of land, and also determine the initial value of the land (Assume that the exchange lacks commercial substance).

Want to see the full answer?

Chapter 10 Solutions