Pearl’s Delivery Company and Martinez’s Express Delivery exchanged delivery trucks on January 1, 2020. Pearl’s truck cost €22,500. It has accumulated depreciation of €15,500 and a fair value of €3,300. Martinez’s truck cost €8,500. It has accumulated depreciation of €6,800 and a fair value of €3,300. The transaction has commercial substance.
Q: Tainan company decides to exchange its old machine and $2,600,000 cash for a new machine. The old…
A: If the transaction has commercial substance, new asset will be recorded at its fair value and any…
Q: Hot Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…
A: As per IAS 16 PPE When PPE are acquired for exchange of another ppe, the same should be valued at…
Q: Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in…
A:
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: 0. The estimated useful life of the machine is 10 years, with no residual value. On the date of the…
A: When it is anticipated that a company's potential cash flows will increase as a consequence of a…
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: In 2021, Detroit transferred goods to a retailer on consignment. The goods cost P450,000 and…
A: Consignment means where consignor send goods to consignee to be sold by later on the behalf of…
Q: On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to…
A: GAAP: Generally Accepted Accounting Principles.
Q: On January 1, 2020, CullumberCorporation sold a building that cost $261,490 and that had accumulated…
A: Accumulated depreciation can be defined as the sum of total depreciation that is charged against the…
Q: Marigold's Delivery Company and Swifty's Express Delivery exchanged delivery trucks on January 1,…
A: Book value Marigold's Truck = €21,500 - €16,000 = €5,500 Fair Value of Truck = €2,800 Loss on…
Q: On September 3, 2018, the Robers Company exchanged equipment with Phifer Corporation. The facts of…
A: In the books of Robers Company: Value of equipment = Fair value of equipment - Cash paid = $75,000…
Q: Presented below are two independent situations. a. On January 1, 2020, Wright Inc. purchased land…
A: a. Determine the amount of the land should be recorded at January 1, 2020. Calculate the amount of…
Q: Saman Co exchanged a Machinery with Amar Inc. in exchange for a building. Saman also paid 50,000 to…
A: If any Property , Plant & Equipment is obtained under exchange with other non monetary assets (…
Q: On September 30, 2020 AssetsToGo Company (ATG) agreed to an exchange of assets with another company.…
A: ''Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave…
A: Disposal of assets: Disposal is an activity of selling the worn-out assets that is no longer in need…
Q: Line Company exchanged a car from its inventory for a computer system to be used in its…
A: Solution: In case of exchange of assets having commercial substance, assets received and asset given…
Q: On September 30, 2020 AssetsToGo Company (ATG) agreed to an exchange of assets with another company.…
A: If the asset is acquired in exchange of another assets, then the cost value of acquired 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: If an exchange has commercial substance then it should be accounted for the fair value. Gain is…
Q: Pensacola Inc. purchased equipment on January 1, 2016 for $135,000.After 3 years Pensacola exchanged…
A: Cost basis means the value of an asset for tax purposes, generally, the purchase price of the asset.…
Q: On March 1, 2022, True Company exchanged an old machine which cost P 1,200,000 and was 50%…
A: Journal entry is the primary step to record the transaction in the books of account. Depreciation…
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: On March 1, Al-Quds Co. exchanged productive assets with Birzeit Co. Al-Quds's asset is referred to…
A: The following calculations are done for Al-Quds Company.
Q: Beeman Company exchanged machinery with an appraised value of $3,538,500, a recorded cost of…
A: Journal entry - It refers to the process where the business transactions are recorded in the books…
Q: Cliff Company traded in an old truck for a new one. The old truck had a cost of $77,000 and…
A: Note: When there is commercial substance exist in the exchange of assets transaction, then new…
Q: FAITH Inc and HOPE Co. have an exchange with no commercial substance. The asset given up by FAITH…
A: Here discussing the factors of exchanging the assets with no commercial substance with this on the…
Q: On March 31, 2019, ABC Enterprises traded in an old machine having a carrying amount of P1,600,000…
A: Assets means the resources owned by company. When amount received at the time of sale of assets is…
Q: Saman Co exchanged a Machinery with Amar Inc. in exchange for a building. Saman also paid 50,000 to…
A: An entity can purchase of sale of asset in exchange of cash or its own asset or a combination of…
Q: Company A had a machine with a carrying amount of P450,000. Company B had a delivery vehicle with a…
A: Here PFRS will apply
Q: Italy Corp. exchanged Building 24, which has an appraised value of $1,700,000; a cost of $2,800,000…
A: Given that, Building 24 Data - appraised value of building $1,700,000 cost of building $2,800,000…
Q: On july 1, 2021, PAOLO exchanged its-non-monetary asset (equipment) with YEN's non-monetary asset…
A: The exchange has significantly changed the cash flows of each entity. the value of new assets will…
Q: Alamos Co. exchanged equipment and $17,000 cash for similar equipment. The book value and the fair…
A: When ever an Equipment has a commercial substance then the Equipment is to be recorded at Fair value…
Q: On January 1, 2020, Kingbird Corporation sold a building that cost $257,510 and that had accumulated…
A: Net Book Value of Building = Cost of the Building - Accumulated depreciation =$257,510 - $102,150…
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: Information concerning Adnan Corporation’s intangible assets is as follows. (a) On January 1, 2019,…
A: A patent is an intellectual property that gives an exclusive right to the new invention, method, or…
Q: Rain Company traded a manual weather machine for an automated weather machine and gave $40,000 cash.…
A: Rain Company Shine Company Cost $495,000 $510,000 Accumulated Depreciation (Bal. Fig.)…
Q: Hunter Sailing Company exchanged an old sailboat for a new one. The old sailboat had a cost of…
A: Solution: Book value of old sailboat = Cost - Accumulated depreciation = $210,000 - $105,000 =…
Q: Parr Company traded in a used delivery truck with a carrying amount of P54,000 for a new delivery…
A: Solution: Amount at which new truck should be recorded on Parr's book = Cash paid + Fair value of…
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: GEE Company and EYCH Inc. decided to exchange machineries on January 1, 2019. The machine of GEE…
A: When it is anticipated that a company's potential cash flows will increase as a consequence of a…
Q: On March 1, 2019, Extreme Company exchanged an old machine having a cost of and accumulated…
A: The non cash assets acquired in exchange process is recorded at fair market value in the accounting…
Q: Pensacola Inc. purchased equipment on January 1, 2016 for $135,000. Aer 3 years Pensacola exchanged…
A: Non-current assets: Non-current assets are the assets purchased not the purpose of resale. It's…
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: 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: a) Prepare all required journal entries in good form on the books of both Bracebridge Incorporated…
A: The first question is answered for you. Please resubmit specifying the question number you want…
Q: Jowee Company exchanged an old machine, costing P3,000,000 and 50% depreciated, for a used machine…
A: Where an asset is exchanged with another asset and the new assets is expected to have commercial…
Q: Kiko group of companies exchanged a car from its inventory for a computer system to be used in its…
A: Journal means the book of prime entry where all entries are recorded in different pages. Ledger…
Q: Prince Company and Albert Company agreed to exchange tractor trailers. Information relating to these…
A: The asset is considered as something that an investor buys with an intention of making income from…
Account Titles and Explanation
|
Debit
|
Credit
|
Equipment
|
|
|
Accumulated Depreciation-Equipment
|
|
|
Loss on Disposal of Plant Assets
|
|
|
Equipment
|
|
|
please make sure the answer is correct 100%
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 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 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:On September 3, 2018, the Robers Company exchanged equipment with Phifer Corporation. The facts of theexchange are as follows:Robers’ Asset Phifer’s AssetOriginal cost $120,000 $140,000Accumulated depreciation 55,000 63,000Fair value 75,000 70,000To equalize the exchange, Phifer paid Robers $5,000 in cash.Required:Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies.
- In June 2021, Titanic Company acquired a machine in exchanged for a non-monetary asset with a cost of P1,200,000 and an accumulated depreciation of P600,000 and paid a cash difference of P160,000. The market value of the non-monetary asset was determined to be P650,000. If the exchange ha commercial substance, what amount of gain is to be recognized?On January 1, 2021, Smith Company sold a piece of machinery to Gaby Company for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next three years, Smith Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows: Fair value of machinery - P2,200,000 Carrying amount of machinery - P1, 700,000 Remaining useful life of the machinery - 8 years Lease term - 3 years Annual rent payable at the end of each year beginning, December 31, 2021- P500,000 Market rate of interest - 10% The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869 The present value of an annuity due of 1 at 10% for 3 periods is 2.7355 1. How much is the gain on sale-leaseback? (round off your final answer to the nearest peso value)On January 1, 2021, Smith Company sold a piece of machinery to Gaby Company for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next three years, Smith Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows: Fair value of machinery - P2,200,000 Carrying amount of machinery - P1, 700,000 Remaining useful life of the machinery - 8 years Lease term - 3 years Annual rent payable at the end of each year beginning, December 31, 2021- P500,000 Market rate of interest - 10% The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869 The present value of an annuity due of 1 at 10% for 3 periods is 2.7355 1. How much is the interest expense for 2021 on the lease liability relating to the right retained in the sale-leaseback transaction? (round off your final answer to the nearest peso value)…
- On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year, starting on December 31, 2021- P500,000• Market rate of interest- 10%• PV of an ordinary annuity of 1 at 10% for 3 periods is 2.4869• PV of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the gain on sale-leaseback? (round off your final answer to the nearest peso value)On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year beginning, December 31, 2021- P500,000• Market rate of interest- 10%• The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869. • The present value of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the interest expense for 2021 on the lease liability relating to the right retained in the sale-leaseback transaction? (round off your final answer to the nearest peso value)On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year beginning, December 31, 2021- P500,000• Market rate of interest - 10%• PV of an ordinary annuity of 1 at 10% for 3 periods is 2.4869• PV of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the lease liability recorded on January 1, 2021?
- On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P2,400,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at beginning of each year, starting on January 1, 2021- P500,000• Market rate of interest- 10%• PV of an ordinary annuity of 1 at 10% for 3 periods is 2.4869• PV of an annuity due of 1 at 10% for 3 periods is 2.7355 What is the amount recorded by Globe Company for the right-of-use asset on January 1, 2021? (round off your final answer to the nearest peso value)On Jan. 1, 2022, ABC Co. sold a machinery to XYZ Co. for P1,900,000. Because of the entity's commitments to its customers to provide their needs for the next 4 years, ABC simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:FV of machinery, P2,200,000CA of machinery, P1,700,000Remaining useful life of machinery, 6 yearsLease term, 4 yearsAnnual rent payable at the end of each year, P500,000Market rate of interest, 10%PVF, ordinary annuity, 10%, 4 periods, 3.1699PVF, ordinary annuity, 10%, 6 periods, 4.3553PVF, single payment, 10%, 4 periods, 0.6830PVF, single payment, 10%, 6 periods, 0.5645What amount of lease liability should ABC record on Jan. 1, 2022?GEE Company and EYCH Inc. decided to exchange machineries on January 1, 2019. The machine of GEE (Machine G) was purchased in January 1, 2016 for ₱1,000,000. The estimated useful life of the machine is 10 years, with no residual value. On the date of the exchange, Machine G’s fair value is ₱680,000. EYCH’s machine (Machine H) was purchased on January 1, 2018, for ₱2,500,000. The estimated useful life of the machine is 5 years, with no residual value. The fair value of Machine H on the date of exchange is ₱2,100,000. Because of the difference in the fair values, included in the agreement is a stipulation wherein GEE shall pay ₱1,500,000. The exchange is considered to be with commercial substance. How much is the gain(loss) from exchange that should be recognized by GEE Company? A. ₱ 80,000 - GAIN B. ₱ 20,000 - GAIN C. ₱ 1,500,000 - L0SS D. ₱ 20,000 - LOSS with solution