ZY Corporation exchanges its old equipment and USD100,000 cash for new equipment. The old equipment has a book value of USD70,000 and a fair value of USD50,000 on the date of the exchange. The cost of the new equipment would be then recorded at what?

ZY Corporation exchanges its old equipment and USD100,000 cash for new equipment. The old equipment has a book value of USD70,000 and a fair value of USD50,000 on the date of the exchange. The cost of the new equipment would be then recorded at what?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 64P

See similar textbooks

Related questions

Q: Vice Corporation is considering replacing a machine that it uses in its operations. Companies that…

A: Answer (c) P 1,025,000 A machine is purchased by Vice Co from Willie Co. by the following terms:-…

Q: Natalie Company purchased a machine for P 6, 600, 000 on January 1, 2014 and received a government…

A: Formula: Straight line depreciation = ( Cost of Asset - Salvage value ) / Useful life years.

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: (i)Harris Ltd. exchanged a parcel of land with a carrying value of $15 million and fair value of $20…

A: As posted multiple independent questions we are answering only first question kindly repost the…

Q: Manama Co, and Muharraq Co. have an exchange with no commercial substance. The asset given up by…

A: Amount Manama should record for the assets received = Book value of assets given + cash paid

Q: Barney exchanges an office building with an adjusted basis of $280,000 and a fair market value of…

A: The recognized gain or loss value of the asset is determined by comparing its carrying value with…

Q: f a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a…

A: Answer : gain recognized on exchange of asset = $ 40,000

Q: On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated…

A: Carrying amount of the Note = Present value of the annual instalments where, Present value of the…

Q: On January 1, 2021, ABC Company sold machinery with carrying amount of P550,000 for P800,000, which…

A: Lease Liability shall be measured at Present value of future lease payments ROU Asset = Present…

Q: MARU S.A. de C.V., a Mexican corporation that follows IFRS, has elected to use therevaluation model…

A: Revaluation of assets means revaluing the asset from its cost to fair value as on different…

Q: The Philippine government grants a huge parcel of land in Cordillera to an entity. The land has a…

A: Here discuss about the net effect of the profit and loss after made the grant of land and its…

Q: What should the company record as depreciation expense for the first year under the straight line…

A: Depreciation is a measure that recognizes a portion of the cost of an asset as an expense, during…

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: During the current year, Erving Company exchange an old packing machine which cost 1 200 00 and…

A: Fixed assets are those assets which a company held for a longer period of time, i.e., for period…

Q: Company A had a machine with a carrying amount of P450,000. Company B had a delivery vehicle with a…

A: Formula: Gain = Fair value of B vehicle - Company A machine value

Q: Toro Co. has equipment with a carrying amount of$700,000. The expected future net cash flows from…

A: Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to create…

Q: Amble Inc. exchanged a truck with a book value of $12,000 and a fair value of $20,000 for a truck…

A: When a fixed asset is exchanged for another fixed asset and the exchange has commercial substance,…

Q: Key Corp. plans to replace a production machine that was acquired several years ago. Acquisition…

A: Given Information: Cost of New Machine=P800,000Repair Cost of Old Machine=P200,000Tax Rate=35%

Q: Assuming that the trade-in allowance is $225,000, what is the amount of cash given? Assuming that…

A: Net purchase price= Fair value -Trade in allowance Gain or loss on exchange= Trade in allowance-…

Q: Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a…

A: Loss or gain on the exchange = Fair value of asset - Book value of asset

Q: On January 1, 2022, J Company acquired an intangible asset from a foreign company. The invoice price…

A: The cost of a separately acquired intangible asset comprise: a) its purchase price, including import…

Q: On January 1, 2021

Q: On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated…

A: Carrying amount of the Note = Present value of the annual instalments where, Present value of the…

Q: What should the company record as depreciation expense for the first year under the straight line…

A: Depreciation is a measure that recognizes a portion of the cost of an asset as an expense, during…

Q: Dabur Limited expected the following future cash fiows from the use of equipment End of Year 1 OMR…

A: Future Cash Flow: It is the method of discounting cash that one is expected to receive in future…

Q: On August 1, 2014, Bright Company purchased a new machine on a deferred payment basis. A down…

A: Solution: Capitalized cost of machine = Cash equivalent price + Installation cost

Q: On January 1, 2021, ABC Company sold machinery with carrying amount of P550,.000 for P800,000, which…

A: Present value of lease liabilities = present value of lease payments made Since payment are made in…

Q: On January 1, 2021, ABC Co. traded in an old equipment with carrying amount of P,1680,000 for a new…

A: In exchange for the asset, the cost of the new asset will be the carrying the value of the old asset…

Q: Llungby AB spent 1,000,000 krone in 2020 on the development of a new product. The company determined…

A: Journal entry is a process of recording and classifying business transactions into books of account…

Q: Zara corporation decided to exchange its old machine that costs $100,000 with a new one. On January…

A: Correct option is A. $40,000

Q: On August 1, 2018, Banco Company purchased a new machine on a deferred payment basis. A down payment…

A: The total cost for fixed that is to be capitalized includes purchasing price, transfer cost and…

Q: amount of loss

A: Carrying amount of the old machine P16,800 Cash difference paid P6,000 Total cash price of the…

Q: In January 2022, Utah Corporation entered into a contract to acquire a new machine for its factory.…

A: Total cost of machine = cash price + installation costs = P2,000,000 + P70,000 = P2,070,000

Q: in the current year, Keyaki Construction Company exchanged a building, which cost $530,000 and had…

A: Tax basis of new building = (Cost of old building - accumulated depreciation) + Cash paid

Q: n October 1, 2021, A Corp. purchased goods from US based corporation worth 60,500 US dollars.…

A: Solution Concept in respect of the monetary assets and liabilities , there shall be initial and…

Q: At the beginning of the current year, Junk Company traded in an old machine having a carrying amount…

A: Total purchase consideration = Carrying value of old machinery + cash paid = P1680000 + 600000 =…

Q: On 1 January 2018, Naviget Bhd bought a trademark for RM100,000. The purpose of the purchase is to…

A: Journals: Recording of business transactions in chronological order. The first step in the…

Q: An airplane priced at a fair value of $750,000 is acquired in a transaction that has commercial…

A: Trade-in allowance refers to the amount of reduction in the price of the property being sold due to…

Q: A lathe priced at a fair market value of $124,000 is acquired in a transaction that has commercial…

A: Book value: The amount of acquisition cost of asset, less accumulated depreciation as on a…

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: 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: Amble, Inc. exchanged a truck with a carrying amount of ₱12,000 and a fair value of ₱20,000 for a…

A: the correct option with proper explanation are as follows.

Q: On January 1, 2020, Ferdie Company entered into a contract to acquire a new machine for its factory.…

A: Machine or fixed assets means the asset which is used by company for many years to come for the…

Q: LLL company has an equipment with carrying value of P350,000 and with remaining estimated life of 5…

A: As per IFRS 16 Leases, the Initial cost of the right-to-use asset in the books of lessee shall…

Q: Tainan company decides to exchange its old machine and $2,600,000 cash for a new machine. The old…

A: An exchange between two parties means when one party provides something, the other party also…

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…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Tainan company decides to exchange its old machine and $2,600,000 cash for a new machine. The old machine has a book value of $1,400,000 and a fair value of $2,400,000 on the date of the exchange. If this transaction has commercial substance, the cost of the new machine would be recorded at
Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a very similar machine. In addition, Wolf paid $6,000 as part of the exchange. Wolf should recognize and gain or loss of what amount?
Tainan company decides to exchange its old machine and $2,600,000 cash for a new machine. The old machine has a book value of $1,400,000 and a fair value of $2,400,000 on the date of the exchange. If this transaction has commercial substance, the cost of the new machine would be recorded at a.$5,000,000. b.$4,000,000. c.$2,600,000. d.cannot be determined.
On December 30, 2019, Machine M with a carrying amount of 120,000 (Cost 400,000) and a fair value of P100,000 was exchanged for a similar asset with a fair value of 150,000 . In addition , Charie paid 10, 000 to acquire the new machine . The exchange was recorded by a debit to Machinery and a credit to cash for 20,000 What is the correct cost of the PPE received ?
A machine cost $1128000, has annual depreciation of $188000, and has accumulated depreciation of $893000 on December 31, 2020. On April 1, 2021, when the machine has a fair value of $258500, it is exchanged for a machine with a fair value of $1269000 and the proper amount of cash is paid. The exchange had commercial substance.The gain to be recorded on the exchange is
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?
Company A had a machine with a carrying amount of P450,000. Company B had a delivery vehicle with a carrying amount of P300,000. Companies A and B exchanged the machine and vehicle, and Company B paid an additional P90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is P420,000. The exchange has commercial substance. How much gain or loss should be recorded by Company B?
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
At the beginning of 2022, Suarez Corp. traded in an old machine for a newer model, a change which had substance. The old machine originally cost $6,192,000, but had a book value at the time of the trade of $310,000 and a market value of $295,000. In addition to the old machine, Suarez Corp. also paid $118,000 for the trade. What did Suarez Corp. recognize as the book value of the new machine? $413,000 $428,000 $6,192,000 $6,310,000 Do not give answer in image
An airplane priced at a fair value of $750,000 is acquired in a transaction that has commercial substance by trading in a similar airplane and paying cash for the difference between the trade-in allowance and the price of the new airplane. Required: Assuming that the trade-in allowance is $225,000, what is the amount of cash given? Assuming that the book value of the airplane traded-in is $175,000, what is the gain or loss on the exchange?
Bomarks acquires an equipment from a foreign supplier on credit for $6 million on 31 March 2022, when the exchange rate was $1 = GH¢ 5. The entity incurred other direct costs of GH¢1.5 million in installing the equipment. The estimated useful life of the equipment is 10 years and the entity has obligation to restore the location to its original state after usage. The estimated cost of dismantling and restoration in 10 years is GH¢3.5 million and the entity’s cost of capital is 8%. Although the equipment was available for use from 1 May 2022, the entity did not bring it into use until 1 July, 2022. Bomarks also sold goods to a foreign customer for $3.5 million on 30 April 2022, when the exchange rate was $1 = GH¢5.75. The customer paid $1 million on 1 July when the rates were $1 = GH¢5.60. On that date, Bomarks paid half of the amount owed for the equipment. At the entity’s year-end of 31 December 2022, the closing exchange rate was $1 = GH¢5.9. The entity’s functional currency is the…
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?