Sunland Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080 plus trade-in, f.o.b.factory.Sunland Inc. paid $10,080 cash and traded in used equipment. The used equipment had originally cost $78,120; it had a book value of$52,920 and a secondhand fair value of $60,228, as indicated by recent transactions involving similar equipment. Freight andinstallation charges for the new equipment required a cash payment of $1,386.(a)Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance. (Creditaccount titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter O for the amounts. List all debit entries before credit entries.)Account Titles and ExplanationDebitCredit

Step 1: Determine the Total Cost of the New EquipmentThe cost of the new equipment as per the…

Answered: Sunland Inc. has negotiated the…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 12PB: Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny...

See similar textbooks

Similar questions

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?
Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.
Grouper Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080 plus trade-in, f.o.b. factory. Grouper Inc. paid $10,080 cash and traded in used equipment. The used equipment had originally cost $78,120; it had a book value of $52,920 and a secondhand fair value of $60,228, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,386. Assuming the same facts as in (a) except that fair value information for the assets exchanged is not determinable, prepare the general journal entry to record this transaction. (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.)
Grouper Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080 plus trade-in, f.o.b. factory. Grouper Inc. paid $10,080 cash and traded in used equipment. The used equipment had originally cost $78,120; it had a book value of $52,920 and a secondhand fair value of $60,228, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,386. Prepare the general journal entry to record this transaction, assuming that the exchange has 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.) Account Titles and Explanation Debit Credit
Ashbrook Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $8,000 plus trade-in, f.o.b. factory. Ashbrook Inc. paid $8,000 cash and traded in used equipment. The used equipment had originally cost $62,000; it had a book value of $42,000 and a secondhand fair value of $47,800, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,100. Instructions a. Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance. b. Assuming the same facts as in (a) except that fair value information for the assets exchanged is not determinable, prepare the general journal entry to record this transaction.
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?
Parr Company traded in a used delivery truck with a carrying amount of P54,000 for a new delivery truck having a list price of P160,000 and paid a cash difference to the dealer of P75,000. The used truck has a fair value of P60,000 on the date of the exchange. At what amount should the new truck be recorded on Parr's books? P135,000 P129,000 P160,000 P106,000
Champion Industries exchanged a dust-scrubbing piece of equipment for another version of the same type of equipment and received $12,000 cash. The old dust scrubber cost $76,200 and had a net book value of $44,000. The new dust scrubber had a fair market value of $60,000. Prepare the journal entry to record the exchange, assuming that the exchange a) has commercial substance, and b) lacks commercial substance.
Acme Corp. entered into an exchange transaction with XYZ Co. Acme gave XYZ used production equipment and $5,000. In return, Acme received two used vehicles. The production equipment Acme gave up related to a discontinued product and had been idle for the previous three months. The equipment cost Acme $180,000 and depreciation of $150,000 had been recorded at the time of the exchange. Acme had attempted to sell the equipment but was unable to locate a buyer until XYZ proposed the current exchange. The vehicles Acme received will be used in current operations. Acme has needed these vehicles for some time but due to cash flow concerns have not been able to purchase these type vehicles. The company has relied on rentals to carry out the company’s needs. Acme has determined, based on market sources, fair value estimates for each of the vehicles. Vehicle 1’s fair value estimate is $15,000 and Vehicle 2’s fair value estimate is $30,000. Acme’s controller, Chuck Hayes, has never dealt…
Rain Company traded a manual weather machine for an automated weather machine and gave $40,000 cash. The manual machine cost $495,000, had a net book value of $350,000, and a fair value of $360,000. The automated machine was originally purchased by Shine Company for $510,000 and had a net book value of $430,000. It has a fair market value of $450,000. Determine the value of the asset received for Rain and Shine assuming the exchange does not have commercial substance. Please include the appropriate dollar sign and commas (example $25,000).
COPS Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost , $550,000) for a molding machine owned by Water Company. The molding machine is carried in Water's Company books at a cost of $240,000 with an accumulated depreciation of $83,000 at the time of exchange. Assume that no cash is involved in the transaction, and the fair value of the automobile is not readily determinable. The fair market value of the molding machine is $172,800. How much is the gain or loss on the exchange of Cool Company

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Financial Accounting: The Impact on Decision Make…

Accounting

ISBN:

9781305654174

Author:

Gary A. Porter, Curtis L. Norton

Publisher:

Cengage Learning

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Financial Accounting: The Impact on Decision Make…

Accounting

ISBN:

9781305654174

Author:

Gary A. Porter, Curtis L. Norton

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS