Italy Corp. exchanged Building 24, which has an appraised value of $1,700,000; a cost of $2,800,000 and accumulated depreciation of $1,300,000, for Building M, which belongs to Russia Ltd. Building M, has an appraised value of $1,580,000, a cost of $3,100,000, and accumulated Depreciation of $1,750,000. Russia paid Italy $120,000 cash, which is equal to the difference between the appraised values of the two buildings. Assume depreciation has been recorded by both companies up to the date of exchange. Required: Prepare the entries on both companies’ books, assuming no commercial substance
Italy Corp. exchanged Building 24, which has an appraised value of $1,700,000; a cost of $2,800,000 and accumulated depreciation of $1,300,000, for Building M, which belongs to Russia Ltd. Building M, has an appraised value of $1,580,000, a cost of $3,100,000, and accumulated Depreciation of $1,750,000. Russia paid Italy $120,000 cash, which is equal to the difference between the appraised values of the two buildings. Assume depreciation has been recorded by both companies up to the date of exchange. Required: Prepare the entries on both companies’ books, assuming no commercial substance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Italy Corp. exchanged Building 24, which has an appraised value of $1,700,000; a cost of $2,800,000 and
Building M, has an appraised value of $1,580,000, a cost of $3,100,000, and accumulated Depreciation of $1,750,000. Russia paid Italy $120,000 cash, which is equal to the difference between the appraised values of the two buildings.
Assume depreciation has been recorded by both companies up to the date of exchange.
Required:
Prepare the entries on both companies’ books, assuming no commercial substance.
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