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.
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.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...
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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
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.
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