Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000 (original cost of $28,000 less accumulated depreciation of $16,000) and a fair value of $9,000. Kapono paid $20,000 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? What is the initial value of the new tractor? 2. Repeat requirement 1 assuming that the fair value of the old tractor is $14,000 instead of $9,000.
Q: Caleb Co. owns a machine that had cost $42,400 with accumulated depreciation of $18,400. Caleb…
A: Journal entry: It refers to the recording of the transaction and event takes place in the business…
Q: Abbott exchanges land in a transaction that lacks commercial substance. The net book value of the…
A: The question says that, there is an exchange of land. If the value of land given is less than the…
Q: Hot Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…
A: As per IAS 16 PPE When PPE are acquired for exchange of another ppe, the same should be valued at…
Q: Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book…
A: 1.
Q: Two independent companies, Denver and Bristol, each own a warehouse, and they agree to an exchange…
A: Loss on exchange=Warehouse(old)-Accumulated depreciation-Fair value=$100,000-$52,000-$43,000=$5,000
Q: COPS Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost ,…
A: Assets means the resources which is owned by business. Liability means the amount which is to be…
Q: Sullivan Corp. exchanged one of their buildings (Building 24), which, on the date of exchange, has…
A: Given that, Data of Building "24" original cost of $2,800,000 accumulated depreciation of $1,300,000…
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: 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: The Tinsley Company exchanged land that it had been holding for future plant expansion for a more…
A: 1.
Q: What is Koch's adjusted basis in machine 2 after the exchange?
A: Machine 1 and Machine 2 are two machines with similar market values.
Q: Payor Inc. and Recipient Co. have an exchange with no commercial substance. The asset given up by…
A: In case of exchange transaction lacks commercial substance or fair value of neither the asset given…
Q: Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract…
A: Financial reporting refers to the reporting of the financial information in the financial statements…
Q: China Inn and Midwest Chicken exchanged assets. China Inn received a delivery truck and gave…
A: Disposal of assets: Disposal is an activity of selling the worn-out assets that is no longer in need…
Q: Cooper and Dane exchanged properties with each other. Cooper exchanged a commercial building and…
A: Realized Gain is the amount realized or profit from the sale of capital asset.
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: Bro exchanged a delivery truck costing P1,000,000 for a parcel of land. The truck had a carrying…
A: Assets can be purchased in exchange of other assets and in addition of some cash, but the criteria…
Q: Bella company entered into an exchange agreement of exchanging its equipment for two pickup…
A: In the case of an exchange, the new asset should be recorded at its fair value.
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: The Tinsley Company exchanged land that it had been holding for future plant expansion for a more…
A: 1. This is an exchange which has commercial substance. Thus, the fair value of new land is…
Q: Beeman Company exchanged machinery with an appraised value of $3,538,500, a recorded cost of…
A: Journal entry - It refers to the process where the business transactions are recorded in the books…
Q: Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of…
A: When a fixed asset is exchanged for another fixed asset and the exchange has commercial substance,…
Q: Cliff Company traded in an old truck for a new one. The old truck had a cost of $77,000 and…
A: Note: When there is commercial substance exist in the exchange of assets transaction, then new…
Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…
A: Solution:- Given, Calaveras Tire exchanged equipment for two pickup trucks. Book Value of equipment…
Q: Company A had a machine with a carrying amount of P450,000. Company B had a delivery vehicle with a…
A: Here PFRS will apply
Q: Goodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is…
A: These are the accounting transactions that are having a monetary impact on the financial statement…
Q: The Bronco Corporation exchanged land for equipment. The land had a book value of $120,000 and a…
A: 1.Determine the fair value of the equipment.
Q: Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value…
A: 1.
Q: Italy Corp. exchanged Building 24, which has an appraised value of $1,700,000; a cost of $2,800,000…
A: Given that, Building 24 Data - appraised value of building $1,700,000 cost of building $2,800,000…
Q: [The following information applies to the questions displayed below.] Case A. Kapono Farms exchanged…
A: As per the guidelines only one question is allowed to be solved. Please upload remaining question…
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: The Tinsley Company exchanged land that it had been holding for future plant expansion for a more…
A: Since multiple subparts are posted, only the first three will be answered.
Q: ABC Inc. and XYZ Co. have an exchange with no commercial substance. The asset given up by ABC Inc.…
A: An exchange has commercial substance if an entity expects the likelihood, the timing, or quantity of…
Q: Bonita Industries traded machinery with a book value of $1110200 and a fair value of $1820000. It…
A: Commercial substance in a exchange transaction means when expectation is such that future cash flows…
Q: ZY Corporation exchanges its old equipment and USD100,000 cash for new equipment. The old equipment…
A: The cost of new equipment is calculated as sum of book value of old asset and cash paid for…
Q: ABC Co. traded a used equipment with a book value of P6,800 and a fair market value of P9,200 for a…
A: Here the problem relating to the exchange of fixed assets. To record the transaction for old…
Q: Bonnie Inc. and Clyde Company have an exchange with no commercial substance. The asset given up by…
A: If exchange lacked commercial , there will be no profit or loss and exchange will be recorded at…
Q: Bonnie Inc. and Clyde Company have an exchange with no commercial substance. The asset given up by…
A: Amount Bonnie should record for the asset received=Book value of asset given up+cash…
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: Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract…
A: In the above question, the following information is provided: Fair value of land grounded on…
Q: Cullumber Company traded machinery with a book value of $525000 and a fair value of $1025000. It…
A: The company is required to record a gain in the books of accounts for the exchange of assets if the…
Q: The Bronco Corporation exchanged land for equipment. The land had a book value of $120,000 and a…
A: Fair value of equipment Land book value. $ 150000 Cash received. $ 10000…
Q: Consider each of the independent transactions below: a) The University of Belize traded an older…
A: In the case of an exchange of assets for obtaining a new asset, the gain or loss from the exchange…
Q: The Tuvok Company exchanged an old asset with a $125,700 tax basis and a $155,000 FMV for a new…
A: Step 1 Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for…
Q: Horton Stores exchanged land and cash of $5,000 for similar land. The book value and the fair value…
A: Introduction: The book value of a firm is the amount of money that shareholders would get if assets…
Q: XYZ Company exchanges the rights to distribute a product in Brisbane which have a carrying amount of…
A: The question is related to acquisition of Intangible asset in exhange for another Intangible asset.…
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: Prince Company and Albert Company agreed to exchange tractor trailers. Information relating to these…
A: The asset is considered as something that an investor buys with an intention of making income from…
Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000 (original cost of $28,000 less accumulated depreciation of $16,000) and a fair value of $9,000. Kapono paid $20,000 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? What is the initial value of the new tractor? 2. Repeat requirement 1 assuming that the fair value of the old tractor is $14,000 instead of $9,000.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000(original cost of $28,000 less accumulated depreciation of $16,000) and a fair value of $9,000. Kapono paid$20,000 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? What is the initial value ofthe new tractor?2. Repeat requirement 1 assuming that the fair value of the old tractor is $14,000 instead of $9,000.Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipmentwere $20,000 (original cost of $65,000 less accumulated depreciation of $45,000) and $17,000, respectively.Calaveras also paid $8,000 in cash. At what amount will Calaveras value the pickup trucks? How much gain orloss will the company recognize on the exchange? Assume the exchange has commercial substance.Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $500,000 and a fair value of $700,000. Kapono paid $50,000 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? What is the initial value of the new land? 2. Repeat requirement 1 assuming that the fair value of the farmland given is $400,000 instead of $700,000. 3. Repeat requirement 1 assuming that the exchange lacked commercial substance.
- Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment were $20,000 (original cost of $65,000 less accumulated depreciation of $45,000) and $17,000, respectively. To equalize fair values, Calaveras paid $8,000 in cash. At what amount will Calaveras value the pickup trucks? How much gain or loss will the company recognize on the exchange? Assume 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 $520,000 and a fair value of $740,000. Kapono paid $54,000 cash to complete the exchange. The exchange has commercial substance. Required: What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 1 and that the exchange lacked commercial substance. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? Assume the same facts as Requirement 2 and that the exchange lacked commercial substance. Assume the fair value of the farmland given is $416,000 instead of $740,000. What is the amount of gain or loss that…Misha Corp. exchanged Land A for Land B. Misha originally purchased Land A for $150,000 and Land A's fair value was $165,000 at the time of the exchange. Misha gave Land A and $12,000 in cash in exchange for Land B, which had a fair market value of $177,000 at the time of the exchange. Assume the exchange qualifies as a like-kind exchange. 1. What is Misha's recognized gain/loss on the exchange? A. $12000 gain B. $0 gain C. $27000 D. $15000 2. What is Misha's basis in Land B? A. $150000 B. $177000 C. $162000
- 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. 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 land? 2. Assume the fair value of the farmland given is $468,000 instead of $870,000. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new land? 3. Assume the same facts as…Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book valueof $500,000 and a fair value of $700,000. Kapono paid $50,000 cash to complete the exchange. The exchangehas commercial substance.Required:1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value ofthe new land?2. Repeat requirement 1 assuming that the fair value of the farmland given is $400,000 instead of $700,000.3. Repeat requirement 1 assuming that the exchange lacked commercial substance.Gilly Construction trades in an old tractor for a new tractor, receiving a $29,000 trade-in allowance and paying the remaining $83,000 in cash. The old tractor had cost $96,000 and had accumulated depreciation of $52,500. Answer the following questions assuming the exchange has commercial substance. 1. What is the book value of the old tractor at the time of exchange? 2. What is the loss on this asset exchange? 3. What amount should be recorded (debited) in the asset account for the new tractor?
- The Bronco Corporation exchanged land for equipment. The land had a book value of $120,000 and a fair value of $150,000. Bronco received $10,000 from the owner of the equipment to complete the exchange which has commercial substance. Required:1. What is the fair value of the equipment?2. Prepare the journal entry to record the exchange.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 $13,500 (original cost of $31,000 less accumulated depreciation of $17,500) and a fair value of $9,300. Kapono paid $23,000 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 $515,000 and a fair value of $730,000. Kapono paid $53,000 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? What is the initial value of the new tractor? 2. Assume the fair value of the old tractor is $17,000 instead of $9,300. 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 entering…! 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?