Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets. C ommercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance. To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 1

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Harrison Home Maintenance bought equipment for $12,600 on January 1, 2020. It has an estimated useful life of six years and zero residual value. Harrison uses the straight-line method to calculate depreciation and records depreciation expense at the end of every month. As of June 30, 2020, the book value of this equipment shown on its balance sheet will be:

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Variable cost per unit:85, selling price per unit: 140

Answer 2

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 3

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 4

Question

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Answer 5

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 6

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 7

Chapter 9, Problem 9.28E

1.

To determine

Exchange of plant assets: It refers to the purchase of new plant assets in exchange of old plant assets.

Commercial substance: It means that the exchange of the plant asset cause changes in the future cash flows as more revenue will generate from the new plant asset due to an increase in its productivity. Thus, if the revenue earned or expenses incurred changes in the future due to the exchange of plant assets, then it will be referred as the exchange has a commercial substance.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 8

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 9

2.

To determine

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author explains the accounting equation for Bank C's trade-in of old fixtures for new ones.

To record: the journal entry of Bank C’s trade-in of old fixtures for new ones.

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Chapter 9 Solutions