Financial Accounting
3rd Edition
ISBN: 9780078025549
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Question
Chapter 7, Problem 7.18E
1.
To determine
The fair value of the new land.
2.
To determine
To record: The exchange made.
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Salad Express exchanged land it had been holding for future plant expansion for a more suitable parcel of land along
distribution routes. Salad Express reported the old land on the previously issued balance sheet at its original cost of
$77,000. According to an independent appraisal, the old land currently is worth $146,000. Salad Express paid $22,500 in
cash to complete the transaction.
Required:
1. What is the fair value of the new parcel of land received by Salad Express?
Fair value of the new land
Salad Express exchanged land it had been holding for future plant expansion for a more suitable parcel of land along distribution routes. Salad Express reported the old land on the previously issued balance sheet at its original cost of $70,000. According to an independent appraisal, the old land currently is worth $132,000. Salad Express paid $19,000 in cash to complete the transaction.Required:1. What is the fair value of the new parcel of land received by Salad Express?2. Record the exchange.
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Chapter 7 Solutions
Financial Accounting
Ch. 7 - Prob. 1RQCh. 7 - What are the two major categories of long-term...Ch. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Equipment includes machinery used in manufacturing...Ch. 7 - Prob. 8RQCh. 7 - Prob. 9RQCh. 7 - Prob. 10RQ
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- Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $520,000 and a fair value of $740,000. Kapono paid $54,000 cash to complete the exchange. The exchange has commercial substance. Required: What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that…arrow_forwardVaibhavarrow_forwardThe Bronco Corporation exchanged land for equipment. The land had a book value of $136,000 and a fair value of $182,000. Bronco paid the owner of the equipment $26,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the fair value of the equipment? Fair valuearrow_forward
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