ADVANCED FINANCIAL ACCOUNTING IA
ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 7, Problem 7.1.4E
To determine

Concept Introduction:

The intercompany transactions occur when the unit of legal entity is having transactions with another unit of the similar entity. This transaction can be divided into two categories such as direct and indirect intercompany transfer. The direct transfer occurs when there is transfer between the different units of the same entity and indirect transfer occurs when the unit of entity acquires debt or assets issued to unrelated entity through another unit of the same entity. This type of transfer will help the entity in improving the flow of finance and asset in efficient manner.

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The amount of equipment and accumulated depreciation to be recorded in consolidated balance sheet.

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Required information [The following information applies to the questions displayed below.] Shahia Company bought a building for $79,000 cash and the land on which it was located for $123,000 cash. The company paid transfer costs of $13,000 ($6,000 for the building and $7,000 for the land). Renovation costs on the building before it could be used were $27,000. Required: 1. Prepare the journal entry to record the purchase of the property, including all relevant expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list View journal entry worksheet No 1 Transaction a Land Building General Journal Debit Credit
Required information [The following information applies to the questions displayed below.] Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $20,500 (original cost of $45,000 less accumulated depreciation of $24,500) and a fair value of $10,700. Kapono paid $37,000 cash to complete the exchange. The exchange has commercial substance. Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $585,000 and a fair value of $870,000. Kapono paid $67,000 cash to complete the exchange. The exchange has commercial substance. 5 Required: 1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor? 2. Assume the fair value of the old tractor is $31,000 instead of $10,700. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor? Complete this question by…
! Required information [The following information applies to the questions displayed below.] Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $14,500 (original cost of $33,000 less accumulated depreciation of $18,500) and a fair value of $9,500. Kapono paid $25,000 cash to complete the exchange. The exchange has commercial substance. Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $525,000 and a fair value of $750,000. Kapono paid $55,000 cash to complete the exchange. The exchange has commercial substance. Required: 1.What is the amount of gain or loss that Kapono would recognize on the exchange of the tractor? 2. Assume the fair value of the old tractor is $19,000 instead of $9,50O. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?

Chapter 7 Solutions

ADVANCED FINANCIAL ACCOUNTING IA

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