6. This machinery was acquired by trading in used machinery. Facts concerning the trade- in are as follows. a Cost of machinery traded (old machine) Accumulated depreciation to date of sale (old machine) Fair value of machinery traded (old machine) Cash received Fair value of machinery acquired (new machine) b $120,000 50,000 93,000 Record the journal entry for the above nonmonetary asset exchange for the following scenarios: The transaction has commercial substance. The transaction lacks commercial substance. 7,000 86,000
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- On july 1, 2021, JULIA exchanged its-non-monetary asset (equipment) with GERALD's non-monetary asset (machinery). the following data were made available: JULIA: Equipment P4,400,000 accumulated depreciation 2,000,000 cash received from gerald 500,000 GERALD: Machinery P3,700,000 Accumulated depreiation 1,800,000 Fair value of the machinery 2,100,000 The transaction lack commerical substance. How much is the cost of the new asset of JULIA?A fixed asset with a cost of $21,296 and accumulated depreciation of $19,166 is traded for a similar asset priced at $68,841 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,779, at what cost will the new equipment be recorded in the books? a.$68,841 b.$64,062 c.$66,192 d.$70,971A fixed asset with a cost of $21,296 and accumulated depreciation of $19,166 is traded for a similar asset priced at $68,841 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,779, at what cost will the new equipment be recorded in the books? a.$68,841 b.$64,062 c.$66,192 d.$70,971A fixed asset with a cost of $21,296 and accumulated depreciation of $19,166 is traded for a similar asset priced at $68,841 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,779, at what cost will the new equipment be recorded in the books? a.$68,841 b.$64,062 c.$66,192 d.$70,971A…A fixed asset with a cost of $36,671 and accumulated depreciation of $33,004 is traded for a similar asset priced at $53,888 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,581, at what cost will the new equipment be recorded in the books? a.$914 b.$4,581 c.$32,090 d.$53,888
- Beck Company and Train Corporation exchange equipment. Relevant information are as follows: Beck Train Equipment 2,000,000 2,500,000 Accumulated depreciation 1,125,000 1,687,500 Fair value 750,000 1,000,000 Cash payment/(received) 250,000 (250,000) Beck Company also traded an old equipment with a dealer for a newer model. Relevant information are as follows:Old equipment:Cost P1,400,000Accumulated depreciation 1,000,000Fair value 350,000Trade in value 500,000New equipment:List price P2,000,000Trade in value of old equipment (500,000)Cash payment P1,500,000Required1. Prepare journal entries related to the exchange using the following assumptions:a) Fair value approachb) Trade in value approachOn July 1, 2021. A exchanged its non-monetary asset (equipment) with B's non-monetary asset (machinery). The following data were made available: A: Equipment P4,400,000 Accumulated depreciation P2,000,000 Cash received from B 500,000 B: Machinery P3,700,000 Accumulated depreciation 1,800,000 Cash paid to A 500,000 The transaction lacks commercial substance. How much is cost of the new asset of A?The information below was extracted from the books of Let Your Light Shine Enterprise: Non-current Asset Cost (GH¢) Date of Acquisition Date of Disposal Proceed from Disposal (GH¢) Machine A 30,000 03/01/15 31/08/17 18,000 Machine B 40,000 01/07/15 - - Machine C 60,000 30/09/15 01/07/17 50,000 Machine D 80,000 01/04/16 - - Additional information: a) As per the enterprise’s accounting policy, depreciation charged is pro-rated on the basis of months of use. All acquisitions and disposals are on cash basis; b) Machines A and B are depreciated at a rate of 20% on reducing balance basis while Machines C and D at 10% on straight line basis; and c) Accounts are prepared to 31st December every year. You are required to: I. Show the relevant accounts for machinery for years to 31st December, 2017; II. Show the Income statement and the statement of financial position for each of the…
- Sheffield Corp. traded in a manual pressing machine for an automated pressing machine and gave $46500 cash. The old machine cost $478000 and had a net book value of $343000. The old machine had a fair value of $310000.Which of the following is the correct journal entry to record the exchange assuming commercial substance? Equipment 659500 Accumulated Depreciation 135000 Equipment 478000 Cash 46500 Equipment 356500 Equipment 310000 Cash 46500 Equipment 356500 Loss on Disposal 33000 Accumulated Depreciation 135000 Equipment 478000 Cash 46500 Cash 46500 Equipment 310000 Loss on Disposal 33000 Accumulated Depreciation 135000 Equipment 524500Diva Ltd has an item of equipment with a carrying amount of $110000 (cost $150000 less accumulated depreciation $40000). the following data has been obtained by Diva in relation to the asset; estimated fair value of the asset less costs of disposal - $90,000 present value of future cash flows expected to be derived from the asset $70000 To account for the impairment loss, the accountant for Diva is considering a number of accounting entries. In accordance with IAS 16 Property, Plant and Equipment and IAS 36 impairment of assets, which one of the following entries is made to recognise the impairment loss?3. The company had the following transactions or events during the year: The company paid $100,000 to exchange an old equipment for a new equipment.The cost and accumulated depreciation of the old equipment were $500,000 and $260,000, respectively. The fair value of the old equipment was $300,000, while the fair value of the new equipment was $450,000. This exchange had commercial substance. The old machinery with the original cost of $5,000 and accumulated depreciation of $4,800 was exchanged for a new machinery.The company paid $6,000 for the new machinery. This exchange did not have commercial substance. The company purchased an equipment on September 1.The equipment will be dismantled, and the estimated site restoration costs of $50,000 will be incurred after 15 years. The current discount rate is 6%. The company recorded accrued interest on this asset retirement liability on December 31. (P/F,6%,15) =0.41727, i.e., the present value of $1 at the discount rate of 6% for 15…
- On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to below as "Asset A," and Wiggins' is referred to as "Asset B." The following facts pertain to these assets.Asset AOriginal Cost $96,000Accumulated Depreciation (to date of exchange) $40,000Fair Value at date of exchange $60,000Cash paid by Hyde, Inc $15,000Asset BOriginal Cost $110,000Accumulated Depreciation (to date of exchange) $47,000Fair Value at date of exchange $75,000Cash paid by Hyde, Inc $15,000Instructions:(a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.(b) Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.E9-1A Acquisition Cost of Long-Lived Asset The following data relate to a firm’s purchase of a machine used in the manufacture of its product: Invoice Price $30,000 Applicable sales tax $2,000 Cash discount taken for prompt payment $400 Freight paid $260 Cost of Insurance coverage on machine while in transit $125 Installation costs $3,000 Testing and adjusting costs $475 Repair of damages to machine caused by the firm’s employee $750…Equipment that cost $656000 and has accumulated depreciation of $286000 is exchanged for equipment with a fair value of $480000 and $120000 cash is received. The exchange lacked commercial substance.The gain to be recognized from the exchange is