Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized. The book value of the old tractor at the time of exchange.

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Answer 1

Question

Chapter 8, Problem 25E

1.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The book value of the old tractor at the time of exchange.

2.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The loss on exchange transaction.

3.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The amount to be recorded on the debit of asset account for the new tractor.

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Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in allowance and paying the remaining $83,000 in cash. The old tractor had cost $96,000 and had accumulated depreciation of $52,500. Answer the following questions assuming the exchange has commercial substance. 1. What is the book value of the old tractor at the time of exchange? 2. What is the loss on this asset exchange? 3. What amount should be recorded (debited) in the asset account for the new tractor?

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Required information [The following information applies to the questions displayed below] Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $20,500 (original cost of $45,000 less accumulated depreciation of $24,500) and a fair value of $10,700. Kapono paid $37,000 cash to complete the exchange. The exchange has commercial substance. Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $585,000 and a fair value of $870,000. Kapono paid $67,000 cash to complete the exchange. The exchange has commercial substance. Required: 1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 2. Assume the fair value of the farmland given is $468,000 instead of $870,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 3. Assume the same facts as…

Answer 2

Question

Chapter 8, Problem 25E

1.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The book value of the old tractor at the time of exchange.

2.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The loss on exchange transaction.

3.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The amount to be recorded on the debit of asset account for the new tractor.

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Answer 3

Question

Chapter 8, Problem 25E

1.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The book value of the old tractor at the time of exchange.

2.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The loss on exchange transaction.

3.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The amount to be recorded on the debit of asset account for the new tractor.

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Answer 4

Question

Chapter 8, Problem 25E

1.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The book value of the old tractor at the time of exchange.

2.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The loss on exchange transaction.

3.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The amount to be recorded on the debit of asset account for the new tractor.

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Answer 5

Chapter 8, Problem 25E

1.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The book value of the old tractor at the time of exchange.

2.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The loss on exchange transaction.

3.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The amount to be recorded on the debit of asset account for the new tractor.

Answer 6

Chapter 8, Problem 25E

1.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The book value of the old tractor at the time of exchange.

Answer 7

Chapter 8, Problem 25E

1.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The book value of the old tractor at the time of exchange.

Answer 8

2.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The loss on exchange transaction.

Answer 9

2.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The loss on exchange transaction.

Answer 10

3.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The amount to be recorded on the debit of asset account for the new tractor.

Answer 11

3.

To determine

Concept Introduction:

Exchange of assets: Plant assets such as machinery, and equipment are exchanged for newer assets, accounting for the exchange of assets depends on if the exchange transaction has commercial substance if the exchange has commercial substance, a gain or loss that is a difference in the value of the old asset and new asset is recognized.

The amount to be recorded on the debit of asset account for the new tractor.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 8 - Prob. 1QS Ch. 8 - Prob. 2QS Ch. 8 - Prob. 3QS Ch. 8 - Prob. 4QS Ch. 8 - Prob. 5QS Ch. 8 - Prob. 6QS Ch. 8 - Prob. 7QS Ch. 8 - Prob. 8QS Ch. 8 - Prob. 9QS Ch. 8 - Prob. 10QS

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Chapter 8 Solutions