Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance. (a) To prepare: To prepare the journal entries .

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Answer 1

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Chapter 10, Problem 10P

To determine

Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance.

(a)

To prepare: To prepare the journal entries.

To determine

(b)

To prepare: To prepare the journal entries on the books of M Construction.

To determine

(c)

To prepare: To prepare journal entries in the books of M and B.

To determine

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

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Answer 2

Question

Chapter 10, Problem 10P

To determine

Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance.

(a)

To prepare: To prepare the journal entries.

To determine

(b)

To prepare: To prepare the journal entries on the books of M Construction.

To determine

(c)

To prepare: To prepare journal entries in the books of M and B.

To determine

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

Expert Solution & Answer

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Answer 3

Question

Chapter 10, Problem 10P

To determine

Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance.

(a)

To prepare: To prepare the journal entries.

To determine

(b)

To prepare: To prepare the journal entries on the books of M Construction.

To determine

(c)

To prepare: To prepare journal entries in the books of M and B.

To determine

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

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Answer 4

Question

Chapter 10, Problem 10P

To determine

Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance.

(a)

To prepare: To prepare the journal entries.

To determine

(b)

To prepare: To prepare the journal entries on the books of M Construction.

To determine

(c)

To prepare: To prepare journal entries in the books of M and B.

To determine

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

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Answer 5

Chapter 10, Problem 10P

To determine

Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance.

(a)

To prepare: To prepare the journal entries.

To determine

(b)

To prepare: To prepare the journal entries on the books of M Construction.

To determine

(c)

To prepare: To prepare journal entries in the books of M and B.

To determine

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

Answer 6

Chapter 10, Problem 10P

To determine

Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance.

(a)

To prepare: To prepare the journal entries.

Answer 7

Chapter 10, Problem 10P

To determine

Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future cash flows are likely to change as a result of the exchange then the transaction has commercial substance.

(a)

To prepare: To prepare the journal entries.

Answer 8

To determine

(b)

To prepare: To prepare the journal entries on the books of M Construction.

Answer 9

To determine

(b)

To prepare: To prepare the journal entries on the books of M Construction.

Answer 10

To determine

(c)

To prepare: To prepare journal entries in the books of M and B.

Answer 11

To determine

(c)

To prepare: To prepare journal entries in the books of M and B.

Answer 12

To determine

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

Answer 13

To determine

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 3Q Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - Prob. 6Q Ch. 10 - 7. Burke Company has purchased two tracts of land....Ch. 10 - Prob. 8Q Ch. 10 - Prob. 9Q Ch. 10 - Prob. 10Q Ch. 10 - Prob. 11Q

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(b)

To prepare: To prepare the journal entries on the books of M Construction.

(c)

To prepare: To prepare journal entries in the books of M and B.

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

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Chapter 10 Solutions

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(b) To prepare: To prepare the journal entries on the books of M Construction.

(c) To prepare: To prepare journal entries in the books of M and B.

(d) To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.

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Chapter 10 Solutions

(b)

To prepare: To prepare the journal entries on the books of M Construction.

(c)

To prepare: To prepare journal entries in the books of M and B.

(d)

To prepare: To prepare the journal entries on the books of (1) M Construction and (2) B Manufacturing.