TB EX Qu. 7-204 Nate's Hot Dogs exchanges long-term assets with Lizzy's. Nate's Hot Dogs exchanges long-term assets with Lizzy's Lemonade. Nate receives a delivery truck and gives up a piece of machinery. The fair value and book value of the machinery were $31,000 and $24,000 (original cost of $34,000 less accumulated depreciation of $10,000), respectively. Since the delivery truck was worth $34,000, Nate paid an additional $3.000 in cash to Lizzy Record the exchange for Nate's Hot Dogs. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list:

TB EX Qu. 7-204 Nate's Hot Dogs exchanges long-term assets with Lizzy's. Nate's Hot Dogs exchanges long-term assets with Lizzy's Lemonade. Nate receives a delivery truck and gives up a piece of machinery. The fair value and book value of the machinery were $31,000 and $24,000 (original cost of $34,000 less accumulated depreciation of $10,000), respectively. Since the delivery truck was worth $34,000, Nate paid an additional $3.000 in cash to Lizzy Record the exchange for Nate's Hot Dogs. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list:

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 47P

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Ashton Company exchanged a nonmonetary asset with a cost of 30,000 and accumulated depreciation of 16,000 for another nonmonetary asset worth 12,000. Ashton also received 1,400 cash. In the entry to record this exchange, Ashton should record a: a. 2,000 gain b. 2,000 loss c. 600 gain d. 600 loss
LO.3 Renata Corporation purchased equipment in 2017 for 180,000 and has taken 83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2019 for 110,000. What is the amount and character of Renatas gain or loss?
5. On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $793,000, with a useful life of 20 years and a $70,000 salvage value. Land Improvements 1 is valued at $305,000 and is expected to last another 10 years with no salvage value. The land is valued at $1,952,000. The company also incurs the following additional costs. Cost to demolish Building 1 $ 348,400 Cost of additional land grading 187,400 Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value 2,202,000 Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 178,000 2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1.
9 On July 1, 2021, JULIA exchanged its non-monetary asset (equipment) with GERALD’s non-monetary asset (machinery). The following data were made available: JULIA: Equipment P4,400,000 Accumulated depreciation 2,000,000 Cash received from Gerald 500,000 GERALD: Machinery P3,700,000 Accumulated depreciation 1,800,000 Cash paid to Julia 500,000 The transaction lacks commercial substance. How much is cost of the new asset of JULIA?
6-SINA Company furnace, which has a current book value of $45000 (Original Cost less accumulated depreciation), has been destroyed. If the insurance company pays Bravo$50000 which of the following transactions should be recorded? A-Debit Cash $50000; Credit Equipment/ Furnace $50000. B- Debit Cash $45000; debit Equipment/ Furnace $45000. C-Credit Gain on Disposition of Equipment/ Furnace $50000; Debit cash $50000. D-debit Equipment/ Furnace $5000; Credit Equipment/ Furnace $45000; debit Cash $50000. E-Credit Gain on Disposition of Equipment/ Furnace $5000; Credit Equipment/ Furnace $45000; Debit Cash $50000.
4. On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $793,000, with a useful life of 20 years and a $70,000 salvage value. Land Improvements 1 is valued at $305,000 and is expected to last another 10 years with no salvage value. The land is valued at $1,952,000. The company also incurs the following additional costs. Cost to demolish Building 1 $ 348,400 Cost of additional land grading 187,400 Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value 2,202,000 Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 178,000 Required:1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.