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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

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Answer 1

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Chapter 10, Problem 9P

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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

To determine

(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

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Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2025, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $75,600 on account. 2. Incurred factory labor costs of $58,800. 3. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other…

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Answer 2

Question

Chapter 10, Problem 9P

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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

To determine

(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

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Answer 3

Question

Chapter 10, Problem 9P

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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

To determine

(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

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Answer 4

Question

Chapter 10, Problem 9P

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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

To determine

(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

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Answer 5

Chapter 10, Problem 9P

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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

To determine

(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

Answer 6

Chapter 10, Problem 9P

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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

Answer 7

Chapter 10, Problem 9P

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 record: To record the exchange for both H and W in accordance with generally accepted accounting principles.

Answer 8

To determine

(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

Answer 9

To determine

(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 2Q 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

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(b)

To determine whether the exchange of Assets A and B lacks commercial substance.

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(b) To determine whether the exchange of Assets A and B lacks commercial substance.

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(b)

To determine whether the exchange of Assets A and B lacks commercial substance.