AU Co. acquired a fixed asset for $36,000 on November 1, 20x1 when the exchange rate was $1 = P23.00. At December 31, 20x1, the entity's year-end, the supplier of the fixed asset has not been paid and the exchange rate at that time was $1 = P25.00. On the December 31, 20x1 statement of financial position, what will be the values for the fixed asset and the creditor who was unpaid?
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- AU Co. acquired a fixed asset for $36,000 on November 1, 20x1 when the exchange rate was $1 = P23.00. At December 31, 20x1, the entity's year-end, the supplier of the fixed asset has not been paid and the exchange rate at that time was $1 = P25.00. On the December 31, 20x1
statement of financial position , what will be the values for the fixed asset and the creditor who was unpaid? - On January 1, 20x6, the Riza Co. purchased equipment for P300,000. The equipment was being
depreciated over an estimated life of 10 years on the straight-line method, with no estimated residual value. On December 31, 20x9, the equipment was sold for P200,000. The historical cost/constant peso statement of profit or loss prepared for the year ended December 31, 20x9 should include how much gain or loss from this sale?
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- Use the following information for the next two questions:On December 29, 20x2 (trade date), Jared Co. enters into a contract to sell a financial asset for its current fair value of ₱4,040 to Hera Co. The asset was acquired one year earlier for ₱4,000 and its carrying amount on December 29, 20x2 is ₱4,000. On December 31, 20x2 (financial year-end), the fair value of the asset is ₱4,024. On January 4, 20x3 (settlement date), the fair value is ₱4,052. 1. If the financial asset sold was classified as held for trading security and the sale is accounted for under the trade date accounting, the entry on December 29, 20x2 in Jared’s books will includea. a ₱4,000 credit to the “Held for trading securities” account.b. a ₱40 debit to unrealized gain.c. a ₱4,000 debit to a receivable account.d. No entry will be made on this date. 2. If the financial asset sold was classified as held for trading security and the sale is accounted for under the settlement date accounting, the entry on December 29,…On March 1, Al-Quds Co. exchanged productive assets with Birzeit Co. Al-Quds's asset is referred to below as "Asset A", and Birzeit's is referred to as "Asset B". The following facts pertain to these assets. Assume the exchange lacks commercial substance. Information Al-Quds Company Birzeit Comp (Asset A) (Asset B) Original cost $200,000 $100,000 Acc. dep. to date of 90,000 30,000 exchange Fair value at date of 160,000 exchange Cash received 30,000 Cash paid 30,000 The recognized gain by Al-Quds Company is: a. $40,625 b. $9,375 c. $50,000 d. $10,000Bomarks acquires an equipment from a foreign supplier on credit for $6 million on 31 March 2022, when the exchange rate was $1 = GH¢ 5. The entity incurred other direct costs of GH¢1.5 million in installing the equipment. The estimated useful life of the equipment is 10 years and the entity has obligation to restore the location to its original state after usage. The estimated cost of dismantling and restoration in 10 years is GH¢3.5 million and the entity’s cost of capital is 8%. Although the equipment was available for use from 1 May 2022, the entity did not bring it into use until 1 July, 2022. Bomarks also sold goods to a foreign customer for $3.5 million on 30 April 2022, when the exchange rate was $1 = GH¢5.75. The customer paid $1 million on 1 July when the rates were $1 = GH¢5.60. On that date, Bomarks paid half of the amount owed for the equipment. At the entity’s year-end of 31 December 2022, the closing exchange rate was $1 = GH¢5.9. The entity’s functional currency is the…
- On September 3, 2018, the Robers Company exchanged equipment with Phifer Corporation. The facts of theexchange are as follows:Robers’ Asset Phifer’s AssetOriginal cost $120,000 $140,000Accumulated depreciation 55,000 63,000Fair value 75,000 70,000To equalize the exchange, Phifer paid Robers $5,000 in cash.Required:Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies.On December 29, 20x1, ABC Co. acquires 1,000 units of an investment through a broker at P1.00 per unit, the quoted price on this date. Ownership over the financial asset transfers to ABC Co. on January 3, 20x2. The fair values per unit on December 31, 20x1 and January 3, 20x2 are P1.75 and P1.50, respectively Requirements: Provide the journal entries under the trade date accounting and the settlement date accounting assuming the financial asset purchased is classified as subsequently measured at: a. FVPL (held for trading securities), b. FVOCI (mandatory); and Amortized cost.ABC Co. traded a used equipment with a book value of P6,800 and a fair market value of P9,200 for a new similar equipment with a list price of P71,200. ABC Co. agreed to pay P52,000 in cash for the exchange in addition to giving up the used equipment. At what amount should the new equipment be recorded
- In June 2021, Titanic Company acquired a machine in exchanged for a non-monetary asset with a cost of P1,200,000 and an accumulated depreciation of P600,000 and paid a cash difference of P160,000. The market value of the non-monetary asset was determined to be P650,000. If the exchange ha commercial substance, what amount of gain is to be recognized?Hizon Holdings Inc. a parent company of a group of companies, but also does its own trading. It bought a fixed assets for $36,000 on November 1, 2019 when the exchange rate was $1 = P23. At December 31, 2019, the company's year-end, the supplier of the fixed asset has not been paid and the exchange rate at that time was $1.00 = P25. The company has not taken out forward exchange contract for this payment as a hedge against adverse exchange rate movements. On the balance sheet date of HIzon Holdings Inc, what will be the values for the fixed assets and the creditor who was unpaid? Group of answer choices a. Fixed Asset - P828,000; Creditor - P900,000 b. Fixed asset - P900,000; Creditor - P900,000 c. Fixed asset - P828,000; Creditor - P828,000 d. Fixed asset - P900,000; Creditor - P828,000On March 1Al-Quds Co. exchanged productive assets with Birzeit Co. Al-Quds's asset is referred to below as "Asset A"and Birzeit's is referred to as "Asset B". The following facts pertain to these assets. Assume the exchange lacks commercial substance . Information Al-Quds Company Birzeit Company (Asset A) (Asset B) Original cost $200,000 $100,000 Acc . dep . to date of exchange 90,000 30,000 Fair value at date Jof exchange 160.000 Cash received 30,000 Cash paid 30,000 The cost of the new asset for Al -Quds Company is : a $130.000 b $120.625 . $ 90,625
- On Jan. 1, 2022, ABC Co. sold a machinery to XYZ Co. for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next 4 years, ABC simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:FV of machinery, P2,200,000CA of machinery, P1,700,000Remaining useful life of machinery, 6 yearsLease term, 4 yearsAnnual rent payable at the end of each year, P500,000Market rate of interest, 10%PVF, ordinary annuity, 10%, 4 periods, 3.1699PVF, ordinary annuity, 10%, 6 periods, 4.3553PVF, single payment, 10%, 4 periods, 0.6830PVF, single payment, 10%, 6 periods, 0.5645What amount of lease liability should ABC record on Jan. 1, 2022?On January 1, 2022, J Company acquired an intangible asset from a foreign company. The invoice price of the intangible was P5,000,000 subject to a 10% discount if acquired on a cash basis. J Company paid P500,000 import duties and professional fees of P50,000 in relation to its acquisition. At what amount should the intangible asset be initially recorded in the books of J Company? NOTE: ANSWER ONLYMachinery with a fair value of $63,000 is acquired in a non-cash exchange. Below are five independent assumptions (a) to (e) as to the consideration given in the exchange: A non-interest-bearing note for $72,450 maturing in one year. Notes of similar risk required 15% interest at the date of the exchange. Cash of $23,000 plus a payment of $46,000 after 12 months. The market interest rate is 15%. Land with a book value of $37,000 and a market value of $64,000. A similar kind of used machinery with a net book value of $36,700 and a fair value of $45,800, plus cash of $16,800. When new, the used machinery cost $56,400. There will be no change in cash flows from operating activities as the result of this exchange. Inventory carried at $42,750 on the most recent balance sheet as part of a perpetual inventory carried at LCM. Cash flows are different as a result. Give the journal entry required for each of the above independent assumptions.