Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction. Given Information: Cost of machine acquired on January 1, 2010 is $260,000. Useful life of machinery is 10 years. Scrap value of the machinery is $20,000. On August 1, 2015; old machine was exchanged for new machine. Market value of new machinery is $157,250. Cash received mounted to $27,750. Fair value of old machine is $185,000.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 11.31E

a.

To determine

Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

b.

To determine

To prepare: Journal entry to record the exchange is as follows:

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

c.

To determine

To prepare: journal entry to record exchange if there is no commercial substance in the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 11.31E

a.

To determine

Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

b.

To determine

To prepare: Journal entry to record the exchange is as follows:

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

c.

To determine

To prepare: journal entry to record exchange if there is no commercial substance in the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 11.31E

a.

To determine

Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

b.

To determine

To prepare: Journal entry to record the exchange is as follows:

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

c.

To determine

To prepare: journal entry to record exchange if there is no commercial substance in the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 11, Problem 11.31E

a.

To determine

Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

b.

To determine

To prepare: Journal entry to record the exchange is as follows:

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

c.

To determine

To prepare: journal entry to record exchange if there is no commercial substance in the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

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Answer 5

Chapter 11, Problem 11.31E

a.

To determine

Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

b.

To determine

To prepare: Journal entry to record the exchange is as follows:

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

c.

To determine

To prepare: journal entry to record exchange if there is no commercial substance in the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

Answer 6

Chapter 11, Problem 11.31E

a.

To determine

Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

Answer 7

Chapter 11, Problem 11.31E

a.

To determine

Gain or loss on the exchange after bringing accumulated depreciation upto the date of transaction.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

Answer 8

b.

To determine

To prepare: Journal entry to record the exchange is as follows:

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

Answer 9

b.

To determine

To prepare: Journal entry to record the exchange is as follows:

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

Answer 10

c.

To determine

To prepare: journal entry to record exchange if there is no commercial substance in the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

Answer 11

c.

To determine

To prepare: journal entry to record exchange if there is no commercial substance in the exchange.

Given Information:

Cost of machine acquired on January 1, 2010 is $260,000.

Useful life of machinery is 10 years.

Scrap value of the machinery is $20,000.

On August 1, 2015; old machine was exchanged for new machine.

Market value of new machinery is $157,250.

Cash received mounted to $27,750.

Fair value of old machine is $185,000.

Answer 12

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Answer 13

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Answer 15

Ch. 11 - Stephen J. Cosgrove is the Former Vice President....Ch. 11 - Prob. 11.2Q Ch. 11 - Prob. 11.3Q Ch. 11 - Prob. 11.4Q Ch. 11 - Will the expense/capitalization choice impact...Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - For a long-lived operating asset acquired by...Ch. 11 - Prob. 11.9Q Ch. 11 - Prob. 11.10Q

Solution Summary: The author calculates gain or loss on the exchange after bringing accumulated depreciation up to the date of transaction.

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