Kingbird Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for similar equipment used in the operations of Oriole Company. The following information pertains to the exchange. Kingbird Co. Oriole Co. Equipment (cost) $33,600 $33,600 Accumulated depreciation 22,800 12,000 Fair value of equipment 15,000 18,600 Cash given up 3,600 (a) Your answer is partially correct. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Kingbird Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for similar equipment used in the operations of Oriole Company. The following information pertains to the exchange. Kingbird Co. Oriole Co. Equipment (cost) $33,600 $33,600 Accumulated depreciation 22,800 12,000 Fair value of equipment 15,000 18,600 Cash given up 3,600 (a) Your answer is partially correct. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PA: Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth...

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Garcia Co. owns equipment that costs $76,800, with accumulated depreciation of $40,800. Garcia sells the equipment for cash. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: A. $47,000 cash B. $36,000 cash C. $31,000 cash
Jada Company had the following transactions during the year: Purchased a machine for $500,000 using a long-term note to finance it Paid $500 for ordinary repair Purchased a patent for $45,000 cash Paid $200,000 cash for addition to an existing building Paid $60,000 for monthly salaries Paid $250 for routine maintenance on equipment Paid $10,000 for major repairs Depreciation expense recorded for the year is $25,000 If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Jadas balance sheet resulting from this years transactions? What amount did Jada report on the income statement for expenses for the year?
Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. A. What is the amount of goodwill in this transaction? B. What is Farm Fresh Agriculture Companys journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?
Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth $4,500,000. A. What is the amount of goodwill in this transaction? B. What is Buchanans journal entry to record the purchase of McLaren? C. What journal entry should Buchanan write when the company internally generates additional goodwill in the year following the purchase of McLaren?
For each of the following transactions, state whether the cost would be capitalized (C) or recorded as an expense (E). A. Purchased a machine, $100,000; gave long-term note B. Paid $600 for ordinary repairs C. Purchased a patent for $45,300 cash D. Paid $200,000 cash for addition to old building E. Paid $20,000 for monthly salaries F. Paid $250 for routine maintenance G. Paid $16,000 for major repairs
Arruza Company exchanged equipment used in its manufacturing operations plus $3,000 in cash for similar equipment used in the operations of LoBianco Company. The following information pertains to the exchange. Arruza Co. LoBianco Co. Equipment (cost) $28,0000 0 $28,0000 Accumulated depreciation 0 19,0000 0 10,0000 Fair value of equipment 0 12,5000 0 15,5000 Cash given up 0 3,0000 0 0 Instructions a. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. b. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
Bossie Company exchanged equipment used in its manufacturing operations plus Rwf 3,000 in cash for similar equipment used in the operations of Veryvey Company. The following information pertains to the exchange. Bossie Co. Veryvey Co. Equipment (cost) Rwf 40,000 Rwf 40,000 Accumulated depreciation 31,000 22,000 Fair value of equipment 24,500 27,500 Cash given up 3,000 Required: Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance. State any four indicators of impairment as outlined by IAS 36: Impairment of Assets.
Carlos Arruza Company exchanged equipment used in its manufacturing operations plus $3,000 in cash for similar equipment used in the operations of LoBianco Company. The following information pertains to the exchange. Carlos Arruza Co. LoBianco Co. Equipment (cost) $28,000 $28,000 Accumulated depreciation 19,000 10,000 Fair value of equipment 12,500 15,500 Cash given up 3,000 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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 approach
In October, Dean Company exchanged an old packing machine costing P240,000 and 50% depreciated, for a dissimilar used machine and paid a cash difference of P32,000. The market value of the old packaging machine was determined to be P140,000. How much is the cost of the newly acquired machine and the amount of gain or loss, respectively, that Dean should record on this exchange?
GRACE Co. recently acquired two items of equipment. Acquired a press at an invoice price of P5,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment were P50,000 and installation cost amounted to P200,000. The cost of testing the equipment is P50,000 while the administration cost has amounted to P30,000. Acquired a welding machine at an invoice price of P3,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. Required: What is the total increase in the equipment account as a result of the transactions?
Siargao Company recently acquired two items of equipment. Acquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was taken. Costs of freight and insurance during shipment v P50,000 and installation cost amounted to P200,000. were Acquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount which was not taken. Additional welding supplies were acquired at a cost of P100,000. What is the total initial amount to be capitalized as the cost of themachineries?