Briyanne, Inc. purchased a computer for RM5,000. During 2016 and 2017, the company recorded total depreciation of RM4,000 on the computer. On January 1, 2018, the company exchanges the computer for a new one, paying RM4,000 cash. The market value of the new computer is RM6,000. Assume the exchange has commercial substance. Based on the information above: a) Calculate the gain or loss of the exchange. b) Determine the journal entries involved.

Briyanne, Inc. purchased a computer for RM5,000. During 2016 and 2017, the company recorded total depreciation of RM4,000 on the computer. On January 1, 2018, the company exchanges the computer for a new one, paying RM4,000 cash. The market value of the new computer is RM6,000. Assume the exchange has commercial substance. Based on the information above: a) Calculate the gain or loss of the exchange. b) Determine the journal entries involved.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

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On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
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