Huling Associates plans to transfer $300,000 of accounts receivable to Mitchell Inc. in exchange for cash. Huling has structured the arrangement so that it retains substantially all the risks and rewards of ownership but shifts control over the receivables to Mitchell. Assuming all other criteria are met for recognizing the transfer as a sale, how would Huling account for this transaction under IFRS? Under U.S. GAAP?
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Huling Associates plans to transfer $300,000 of
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- Jarvis Corporation transacts business with a number of foreign vendors and customers. These transactions are denominated in FC, and the company uses a number of hedging strategies to reduce the exposure to exchange rate risk. Several such transactions are as follows:Transaction A: On November 30, the company purchased inventory from a vendor in the amount of 100,000 FC with payment due in 60 days. Also on November 30, the company purchased a forward contract to buy FC in 60 days. Assume a fair value hedge.Transaction B: On November 1, the company committed to provide services to a foreign customer in the amount of 100,000 FC. The services will be provided in 30 days. On November 1, the company also purchased a forward contract to sell 100,000 FC in 30 days. Changes in the value of the commitment are based on changes in forward rates.Transaction C: On November 1, the company forecasted a purchase of equipment in 30 days. The forecasted cost is 100,000 FC, and the equipment is to be…Tainan company decides to exchange its old machine and $2,600,000 cash for a new machine. The old machine has a book value of $1,400,000 and a fair value of $2,400,000 on the date of the exchange. If this transaction has commercial substance, the cost of the new machine would be recorded atMikkeli OY acquired a brand name with an indefinite life in 2021 for 43,600 markkas. At December 31, 2020, the brand name could be sold for 35,200 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 45,870 markkas, and the present value of this amount is 34,200 markkas. Assume that Mikkeli OY is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020 conversion worksheet to convert IFRS balances to U.S. GAAP.
- On September 3, 2024, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows: Robers’ Asset Phifer’s Asset Original cost $ 215,000 $ 235,000 Accumulated depreciation 131,000 139,000 Fair value 103,500 79,500 To equalize the exchange, Phifer paid Robers $24,000 in cash. Required: Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.On October 1, 2020, Mud Co., a U.S. company, purchased parts from Terra, a Portuguese company, with payment due on December 1, 2020. If Mud's 2020 operating income included no foreign exchange gain or loss, the transaction could have _____. A. Been denominated in U.S. dollars. B. Generated a foreign exchange gain to be reported as a deferred charge on the balance sheet. C. Resulted in an extraordinary gain. D. Generated a foreign exchange loss to be reported as a separate component of stockholders' equity.Nu Corp. agreed to give Rand Co. a machine in full settlement of a note payable to Rand. The machine's original cost was $140,000. The note's face amount was $110,000. On the date of the agreement, the note's carrying amount was $105,000, and its present value was $96,000. The machine's carrying amount was $109,000, and its fair value was $96,000. What amount of net gain (or losses) should Nu recognize? Please dont provide solution image based thanax
- A printing press priced at a fair market value of $275,000 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press.a Assuming that the trade-in allowance is $90,000, what is the amount of cash given?b. Assuming that the book value of the press traded in is $68,000, what is the gain or loss on the exchange?On October 1, 2021, A Corp. purchased goods from US based corporation worth 60,500 US dollars. Payment is due in 120 days on January 30, 2022. In view of the transaction, Active Corp. entered into a forward contract to buy 60,500 US dollars from PNB in 120 days. The relevant rates are as follows: 10/01/21 12/31/21 01/30/22 Spot rate P 53 P 55 P 53.50 Forward rate 54 56.50 55How much is the net forex loss on settlement date?XYZ Corp, has carried out transactions denominated in foreign currency during the financial year ended 31 October 2019 and has conducted foreign operations through a foreign entity. Its functional and presentation currency is the US dollar. XYZ purchased inventory from a foreign supplier for Euros 8 million on 31 July 2019, the trade payable was still outstanding and the inventory were still held by XYZ Corp. XYZ Corp sold its products to a foreign customer for Euros 4 million on 31 July 2019 and received payment for the products in euros on 31 October 2019. Additionally, XYZ Corp purchase investment property on 1 November 2018 for Euros 28 million. At 31 October 2019, the investment property had a fair value of Euros 24 million. The company uses the fair value model in accounting for its investment properties. XYZ would like advice on how to treat this transactions in the financial statement for the year ended 31 October 2019. Exchange rates Date Euro:$ Average Rate for Year to…
- Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes for given problem. Mikkeli OY acquired a brand name with an indefinite life in 2015 for 40,000 markkas. At December 31, 2017, the brand name could be sold for 35,000 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 42,000 markkas, and the present value of this amount is 34,000 markkas.a. Determine the appropriate accounting for this brand name for the year ending December 31, 2017, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2017, conversion worksheet to convert IFRS balances to U.S. GAAP.AAA Ltd sells and delivers goods to XXX Ltd on 13 March. Both parties agree that XXX Ltd will hold the goods on consignment to be sold to third parties. XXX Ltd is not required to pay AAA Ltd for the goods until they are sold to a third party. Which of the following statements is incorrect? a. AAA Ltd retains the risks and rewards of ownership of the goods after delivery to XXX Ltd. b. At the time of delivery of the goods to XXX Ltd there is no probability that future economic benefits will flow to AAA Ltd. c. AAA Ltd does not recognise any revenue until XXX Ltd has on-sold goods to a third party. d. AAA Ltd recognises revenue on 13 March for the sale of goods to XXX Ltd.Two independent companies, Denver and Bristol, each own a warehouse. On January 1, they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $63,000 Accumulated depreciation 50,000 25,000 Fair value 48,000 46,000 Bristol agrees to pay Denver $2,000 to complete the exchange. Required: Assuming the transaction has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.