Mehta Company traded a used welding machine (cost $9,000, accumulated depreciation $3,000) for office equipment with an estimated fair value of $5,000. Mehta also paid $3,000 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)
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A: Assets means the resources which is owned by business. Liability means the amount which is to be…
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A: Gain or loss on Exchange:-When a company exchanges assets for another asset from another company, if…
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A: The exchange refers to the situation where old assets are exchanged with new assets. The new…
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A: If an asset is acquired in exchange for a non monetary asset or in combination of monetary and non…
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A: Disposal of assets: Disposal is an activity of selling the worn-out assets that is no longer in need…
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A: Fixed assets are those assets which a company held for a longer period of time, i.e., for period…
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A: When exchange lack commercial substance exist, the exchange of assets would be recorded at cost of…
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A: In the case of an exchange, the new asset should be recorded at its fair value.
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A: Journal entry: It is a systematic record of a financial transaction of an organization recorded in…
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A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
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A: Note: When there is commercial substance exist in the exchange of assets transaction, then new…
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A: The verification of the percentage of the cash received whether it exceeds 25% of the fair value of…
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A: 1.Determine the fair value of the equipment.
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A:
Q: Alamos Co. exchanged equipment and $17,000 cash for similar equipment. The book value and the fair…
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Q: During the current year, Marshall Construction trades an old crane that has an original cost…
A: a) i) ii) Marshall Construction should record the same entry as in part (a) above.
Q: Company Inc., exchanged land and cash of $8,000 for equipment. The land was purchased at $55,000 a…
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…
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…
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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: 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: China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave…
A: China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave…
Q: Kingbird Company exchanged equipment used in its manufacturing operations plus $3,600 in cash for…
A: Journal means the book of prime entry where all entries are recorded in different pages.
Q: Caine Company exchanged a car from inventory for a computer to be used as a long-term asset. The…
A: Journal entries (JF) refers to the very basic step in the accounting cycle and records the daily…
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A: (a.) Description Debit Credit Equipment (new) A/c $19,000 Accumulated…
Q: Crane Company exchanged equipment used in its manufacturing operations plus $3,300 in cash for…
A: (1) Prepare journal entries for Crane Co. and Cheyenne Co. to record exchange, if exchange lacks…
Mehta Company traded a used welding machine (cost $9,000, accumulated
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- 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?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?On March 1, 2022, True Company exchanged an old machine which cost P 1,200,000 and was 50% depreciated, for another used machine and paid a cash difference of P 160,000. The fair value of the old machine was determined to be P 700,000. Prepare the journal entry to record the exchange:
- Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in allowance and paying the remaining $83,000 in cash. The old tractor had cost $96,000 and had accumulated depreciation of $52,500. Answer the following questions assuming the exchange has commercial substance. 1. What is the book value of the old tractor at the time of exchange? 2. What is the loss on this asset exchange? 3. What amount should be recorded (debited) in the asset account for the new tractor?Flounder Company traded a used welding machine (cost $12,420, accumulated depreciation $4,140) for office equipment with an estimated fair value of $6,900. Flounder also paid $4,140 cash in the transaction. Prepare the journal entry to record the exchange.On August 1, Gold Company exchanged a machine for a similar machine owned by Cowboy Company and also received $7,000 cash from Cowboy Company. Gold's machine had an original cost of $80,000, accumulated depreciation to date of $14,500, and a fair market value of $60,000. Cowboy’s machine had an original cost of $95,000 and a book value of $45,000 and a fair value of $53,000.Required:a. Prepare the necessary journal entry by Gold Company to record this transaction.b. Prepare the necessary journal entry by Cowboy Company to record this transaction.
- 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?Caleb Company owns a machine that had cost $46,000 with accumulated depreciation of $20,200. Caleb exchanges the machine for a newer model that has a market value of $56,000. Record the exchange assuming Caleb paid $31,800 cash and the exchange has commercial substance. Record the exchange assuming Caleb paid $23,800 cash and the exchange has commercial substance.Saman Co exchanged a Machinery with Amar Inc. in exchange for a building. Saman also paid 50,000 to Amar for this exchange. Other details of the transaction are provided below: Saman Co. equipment: Cost Accumulated depreciation Fair value Required- $950,000 150,000 600,000 Amar Inc. Building: Cost Accumulated depreciation Fair value $750,000 180,000 550,000 a) Prepare the journal entry in the books of both companies, assuming both are publicly traded. b) Assuming now that Saman is a private company and that the fair value of building is the most reliable fair value, prepare the journal entry for Saman Co.
- A company exchanged old equipment and $18,200 cash for similar equipment. The book value and the fair value of the old equipment were $81,000 and $91,800, respectively. Assuming that the exchange has commercial substance, the company would record a gain(loss) of: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.)Crane Company exchanged equipment used in its manufacturing operations plus $3,300 in cash for similar equipment used in the operations of Cheyenne Company. The following information pertains to the exchange. Crane Co. Cheyenne Co. Equipment (cost) $30,800 $30,800 Accumulated depreciation 20,900 11,000 Fair value of equipment 13,750 17,050 Cash given up 3,300 1) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. 2) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
