What is Koch's adjusted basis in machine 2 after the exchange?
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Koch traded machine 1 for machine 2 when the fair market value of both machines was $50,000. Koch originally purchased machine 1 for $76,300 and machine 1's adjusted basis was $40,650 at the time of the exchange. Machine 2's seller purchased it for $64,350 and machine 2's adjusted basis was $55,650 at the time of the exchange. What is Koch's adjusted basis in machine 2 after the exchange?
Machine 1 and Machine 2 are two machines with similar market values.
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- ABC Co. traded a used equipment with a book value of P6,800 and a fair market value of P9,200 for a new similar equipment with a list price of P71,200. ABC Co. agreed to pay P52,000 in cash for the exchange in addition to giving up the used equipment. At what amount should the new equipment be recordedCooper and Dane exchanged properties with each other. Cooper exchanged a commercial building and land with a basis of $200,000 and a fair market value of $400,000. The property exchanged by Cooper was also subject to a $160,000 liability that was assumed by Dane in the exchange. In addition to the liability assumption, Dane gave Cooper a smaller commercial building in a different location. That building had a fair market value of $330,000 and an adjusted basis to Dane of $260,000. The property exchanged by Dane was subject to a $120,000 liability that was assumed by Cooper in the exchange. To even up the exchange, Dane also gave Cooper $30,000 in cash. What was Dain's realized gain?Consider each of the following independent situations: a. GYT Co. exchanges a machine that cost $4,000 and has accumulated amortization of $2,560 for a similar machine. GYT also receives $25 in the exchange. The fair market value of the old asset is $750. The fair market value of the new asset is $725. There is no commercial substance to the transaction. b. FST Co. exchanges a machine that cost $4,000 and has accumulated amortization of $3,560 for a similar machine. FST also receives $25 in the exchange. The fair market value of the old asset is $750. The fair market value of the new asset is $725. There is no commercial substance to the transaction. c. LKC Co. pays $250 and exchanges a machine that cost $3,000 and has accumulated amortization of $1,900 for a similar machine. The fair market value of the old asset is undeterminable. The fair market value of the new asset is $690. The transaction has commercial substance. d. HRT Co. pays $250 and exchanges a…
- ABC Co. traded a used equipment with a book value of P6,800 and a fair market value of P9,200 for a new similar equipment with a list price of P71,200. ABC Co. agreed to pay P52,000 in cash for the exchange in addition to giving up the used equipment. At what amount should the new equipment be recorded? * P71,200 P61,200 P58,800 None of the aboveOn 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 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)…Beeman Company exchanged machinery with an appraised value of $3,538,500, a recorded cost of $5,435,000 and accumulated depreciation of $2,717,500 with Lacey Corporation for machinery Lacey owns. The machinery has an appraised value of $3,358,500, a recorded cost of $6,430,000, and accumulated depreciation of $3,536,500. Lacey also gave Beeman $180,000 in the exchange. Assume depreciation has already been updatedUse the following information for the next two questions:On December 29, 20x2 (trade date), Jared Co. enters into a contract to sell a financial asset for its current fair value of ₱4,040 to Hera Co. The asset was acquired one year earlier for ₱4,000 and its carrying amount on December 29, 20x2 is ₱4,000. On December 31, 20x2 (financial year-end), the fair value of the asset is ₱4,024. On January 4, 20x3 (settlement date), the fair value is ₱4,052. 1. If the financial asset sold was classified as held for trading security and the sale is accounted for under the trade date accounting, the entry on December 29, 20x2 in Jared’s books will includea. a ₱4,000 credit to the “Held for trading securities” account.b. a ₱40 debit to unrealized gain.c. a ₱4,000 debit to a receivable account.d. No entry will be made on this date. 2. If the financial asset sold was classified as held for trading security and the sale is accounted for under the settlement date accounting, the entry on December 29,…