Miley Corp. exchanges old equipment that costs $12,000 (accumulated depreciation of $5,400) for new equipment. The fair value of the new equipment is $9,600. The fair value of the old equipment cannot be reliably estimated. Required Prepare the entry to record acquisition of the new equipment under each of the following separate cases. a. Transaction has commercial substance. No cash is involved. b. Transaction has commercial substance. Cash of $3,600 is paid by Miley. c. Transaction lacks commercial substance. No cash is involved. d. Transaction lacks commercial substance. Cash of $1,200 is paid by Miley. e. Transaction lacks commercial substance. Cash of $2,400 is received by Miley. Exchange has Commercial Substance Exchange Lacks Commercial Substance Prepare the entry to record acquisition of the new equipment under each of the following separate cases. a. Transaction has commercial substance. No cash is involved. b. Transaction has commercial substance. Cash of $3,600 is paid by Miley.

Miley Corp. exchanges old equipment that costs $12,000 (accumulated depreciation of $5,400) for new equipment. The fair value of the new equipment is $9,600. The fair value of the old equipment cannot be reliably estimated. Required Prepare the entry to record acquisition of the new equipment under each of the following separate cases. a. Transaction has commercial substance. No cash is involved. b. Transaction has commercial substance. Cash of $3,600 is paid by Miley. c. Transaction lacks commercial substance. No cash is involved. d. Transaction lacks commercial substance. Cash of $1,200 is paid by Miley. e. Transaction lacks commercial substance. Cash of $2,400 is received by Miley. Exchange has Commercial Substance Exchange Lacks Commercial Substance Prepare the entry to record acquisition of the new equipment under each of the following separate cases. a. Transaction has commercial substance. No cash is involved. b. Transaction has commercial substance. Cash of $3,600 is paid by Miley.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 28RQSC

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