Company A had a machine with a carrying amount of 450,000. Company B had a delivery vehicle with a carrying amoung of 300,000. Companies A and B exchanged the machine and vehicle, and Company B paid an additional 90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is 420,000. The exchange has commercial substance. How much gain or loss should be recorded by Company B?

Q: A and B have an exchange with no commercial substance. The equipment given up by A has a historical…

A: Exchange of Assets It is important to recognize gain or loss at the time of exchange of assets…

Q: wo independent companies, Denver and Bristol, each own a warehouse, and Denver agrees to pay Bristol…

A: The exchange of assets is calculated on the basis of book value and the fair value of new assets. If…

Q: Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in…

A:

Q: Stellar Company exchanged equipment used in its manufacturing operations plus $3,960 in cash for…

A: Journal entry: Journal is a book of prime entry or a book of original entry in which transactions…

Q: Two independent companies, Denver and Bristol, each own a warehouse, and they agree to an exchange…

A: Loss on exchange=Warehouse(old)-Accumulated depreciation-Fair value=$100,000-$52,000-$43,000=$5,000

Q: COPS Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…

A: Assets means the resources which is owned by business. Liability means the amount which is to be…

Q: Love Inc. and Life Co. have an exchange with no commercial substance. The asset given up by Love…

A: Book value of asset given up = P12,000 Cash paid = P4,000 Amount to be recorded by Love Inc. = Book…

Q: f a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a…

A: Answer : gain recognized on exchange of asset = $ 40,000

Q: Parr Company traded in a used delivery truck with a carrying amount of P54,000 fora new delivery…

A: If exchange have commercial substance, the value of new assets  will be recorded at faie value of…

Q: Khong Guan has negotiated the purchase of a new piece of automatic equipment at a price of HK$7,000…

A: Exchange has commercial substance.   Automatic Equipment  Accumulated Depreciation - Equipment…

Q: Bro exchanged a delivery truck costing P1,000,000 for a parcel of land. The truck had a carrying…

A: Assets can be purchased in exchange of other assets and in addition of some cash, but the criteria…

Q: Company A had a machine with a carrying amount of P450,000.  Company B had a delivery vehicle with a…

A: Formula: Gain = Fair value of B vehicle - Company A machine value

Q: Bella company entered into an exchange agreement of exchanging its equipment for two pickup…

A: In the case of an exchange, the new asset should be recorded at its fair value.

Q: Amble Inc. exchanged a truck with a book value of $12,000 and a fair value of $20,000 for a truck…

A: When a fixed asset is exchanged for another fixed asset and the exchange has commercial substance,…

Q: Ray Company traded in an old machine having a carrying amount of P16,800 and paid a cash difference…

A: Property, Plant, and Equipment or PP&E is a classification shown on a balance sheet. It normally…

Q: Company A had a machine with a carrying amount of P450,000.  Company B had a delivery vehicle with a…

A: Here in this question, we are required to determine how much gain or loss should be recorded by…

Q: Mary Co. exchanged a piece of equipment that had cost $40,000 (now 75% depreciated) for a truck with…

A: Accumulated depreciation on equipment = Cost of equipment x depreciation % = $40,000 x 75% = $30,000

Q: Hoyle Company traded machinery with a book value of $680,000 and a fair value of $720,000. In…

A: Book value (also known as the carrying value) is the amount at which an asset is being reported in…

Q: Kaohsiung company exchanges its old office equipment and $85,000 for new office equipment. The old…

A: Kaohsiung company exchanges its old office equipment and $85,000 for new office equipment. The old…

Q: Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000…

A: When a fixed asset is exchanged for another fixed asset and the exchange has commercial substance,…

Q: | Aylmer Inc. exchanged equipment used in its business for similar equipment used by Belmont Inc.…

A: When the commercial substance exists, the asset acquired must be recognized at Fair value, & If…

Q: Mathison Company exchanged a worn-out tractor that had cost $30,000 and was half depreciated for a…

A: Asset is the value of the items owned the firm. It can be tangible or intangible in nature. It can…

Q: KAJ Incorporated purchased a machine costing $250,000 by paying $35,000 and signing a $215,000 note…

A: Cash flow from Financing activities: Cash flow from Financing activities include transactions…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: Solution:- Given, Calaveras Tire exchanged equipment for two pickup trucks. Book Value of equipment…

Q: King Corp. traded an old machine with book value of $60,000 (original cost $110,000) and a fair…

A: Gain on machine = Fair value of machine exchanged - book value of old machine = 90000-60000 =…

Q: For what amount will LAR record the range?

A: Recording the purchase of an asset is an important ledger entry as it show cases in the balance…

Q: Cheyenne Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for…

A: The verification of the percentage of the cash received whether it exceeds 25% of the fair value of…

Q: Goodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is…

A: These are the accounting transactions that are having a monetary impact on the financial statement…

Q: X-ray company traded in an old machine having a carrying amount of 16,800 and paid a cash difference…

A: It is pertinent to note that if Property, Plant and Equipment is acquired in exchange of a…

Q: Grabrille Inc. and Lucy Company have an exchange with no commercial substance. The asset given up by…

A: Assets means the resources which is owned by business. Liability means the amount which is to be…

Q: amount of loss

A: Carrying amount of the old machine P16,800 Cash difference paid P6,000 Total cash price of the…

Q: HOT Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…

A: Assets means the resources which is owned by business. Liability means the amount which is to be…

Q: One of the companies purchased a set of fixed assets for an amount of 12 million dinars in cash. The…

A: Journal is a primary book where transactions are originally recorded. Further, a journal entry is…

Q: Harris Ltd. exchanged a parcel of land with a carrying value of $15 million and fair value of $20…

A: The carrying value of an asset is the value at which the company records the asset in its balance…

Q: Cliff Company traded in an old truck for a new one. The old truck had a cost of $300,000 and…

A: Recorded value of new Truck = Fair value of the new Truck received  where, Fair value of the new…

Q: Information Processing, Inc. (IPI) exchanges its used machine for a new machine with Jerrod Business…

A: The acquisition of assets is a part of business activities. When the company disposes of the asset…

Q: ABC Co. traded a used equipment with a book value of P6,800 and a fair market value of P9,200 for a…

A: Here the problem relating to the exchange of fixed assets.  To record the transaction for old…

Q: Bonnie Inc. and Clyde Company have an exchange with no commercial substance. The asset given up by…

A: If exchange lacked commercial , there will be no profit or loss and exchange will be recorded at…

Q: Bonnie Inc. and Clyde Company have an exchange with no commercial substance. The asset given up by…

A: Amount Bonnie should record for the asset received=Book value of asset given up+cash…

Q: Yin Co traded in an old machine having a carrying amount of P16,800, and paid a cash difference of…

A: Carrying value of an asset refers to the value that is the difference of original cost of asset and…

Q: Harris Ltd. exchanged a parcel of land with a carrying value of $15 million and fair value of $20…

A: The carrying value of an asset is the value at which the company records the asset in its balance…

Q: HOT Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…

A: When fixed assets is exchange , then fair value of assets exchange should be determined and compared…

Q: Kingbird Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for…

A: If exchange of assets lacks commercial substance , i.e. fair values are not reliable then Property…

Q: Amble, Inc. exchanged a truck with a carrying amount of ₱12,000 and a fair value of ₱20,000 for a…

A: the correct option with proper explanation are as follows.

Q: C Inc. and D Co. have an exchange with no commercial substance. The asset given up by C Inc. has a…

A: If exchange has no commercial substance, there will be no profit or loss and exchange will be…

Q: Consider each of the independent transactions below: a) The University of Belize traded an older…

A: In the case of an exchange of assets for obtaining a new asset, the gain or loss from the exchange…

Q: Alvarez and Reymond, both NGAs, exchanged their equipment. Relevant data is presented below…

A: Calculation of Initial Value of New Asset Initial value of New Asset       Fair Value of…