Question

A printing press priced at a fair market value of $471,700 is acquired in a transaction...

A printing press priced at a fair market value of $471,700 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press.

a. Assuming that the trade-in allowance is $207,500, what is the amount of cash given?
$_______________

b. Assuming that the book value of the press traded in is $186,800, what is the gain or loss on the exchange?
_______________ $______________-

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Answer

a
Fair market value $         471,700
Less: Trade-in allowance $         207,500
Amount of cash given $         264,200
b
Trade-in allowance $         207,500
Less: Book value of the press $         186,800
Gain on exchange $           20,700
Please like
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Loftin Company traded machinery with a book value of $950,000 and a fair value of $900,000....
Loftin Company traded machinery with a book value of $950,000 and a fair value of $900,000. It received in exchange from Thomas Company a machine with a fair value of $1,000,000. Loftin also paid cash of $100,000 in the exchange. Thomas’s machine has a book value of $950,000. What amount of gain or loss should Loftin recognize on the exchange (assuming lack of commercial substance)? Group of answer choices $ -0-. $100,000 gain $5,000 loss $50,000 loss
Loftin Company traded machinery with a book value of $950,000 and a fair value of $900,000....
Loftin Company traded machinery with a book value of $950,000 and a fair value of $900,000. It received in exchange from Thomas Company a machine with a fair value of $1,000,000. Loftin also paid cash of $100,000 in the exchange. Thomas’s machine has a book value of $950,000. What amount of gain or loss should Loftin recognize on the exchange (assuming lack of commercial substance)?
Alamos Co, exchanged equipment and $18,000 cash for similar equipment. The book value and the fair...
Alamos Co, exchanged equipment and $18,000 cash for similar equipment. The book value and the fair value of the old equipment were $82,000 and $90,000 respectively. Assuming that the exchange has commercial substance, Alamos would record a gain (loss) of: 26,000 8,000 <8,000> 0 Prepare the journal entry for the above transaction.
Carla Vista Co. traded machinery with a book value of $580000 and a fair value of...
Carla Vista Co. traded machinery with a book value of $580000 and a fair value of $970000. It received in exchange from Sheridan Company a machine with a fair value of $873000 and cash of $97000. Sheridan’s machine has a book value of $921500. What amount of gain should Carla Vista recognize on the exchange (assuming lack of commercial substance)?
A2 Card Ltd has acquired a printing press from Metal B Ltd. The deal required A2...
A2 Card Ltd has acquired a printing press from Metal B Ltd. The deal required A2 Card Ltd to exchange the following assets for the printing press Shares in A2 Card Ltd 200,000 shares with a market value of $1.10 each Vehicle Cost $80,000, accumulated depreciation $32,000, fair value $60,000 Cash $20,000 The cost to install the press was $4000 (not yet paid). What is the entry to record the purchase of the printing press? Dr Cr Printing press 304,000...
Our Company trades in old equipment that cost $32,000, has a book value of $21,000 and...
Our Company trades in old equipment that cost $32,000, has a book value of $21,000 and a fair market value of $24,500. The new equipment has a list price of $33,000. We receive a trade in allowance for the old equipment of $29,000. This transaction has commercial substance. Prepare the journal entry to record this exchange. 1B .Our Company trades in old equipment that cost $32,000, has a book value of $21,000 and a fair market value of $19,000. The...
Tallman Company traded machinery with a book value of $600,000 and a fair value of $1,000,000....
Tallman Company traded machinery with a book value of $600,000 and a fair value of $1,000,000. It received in exchange from Lewis Company a machine with a fair value of $900,000 and cash of $100,000. Lewis’s machine has a book value of $950,000. What amount of gain should Tallman recognize on the exchange (assuming lack of commercial substance)? Group of answer choices $40,000 $400,000 $ -0- None of the other answers are correct $100,000
Iniesta Company traded machinery with original cost of $220,000 and accumulated depreciation of $30,000. It received...
Iniesta Company traded machinery with original cost of $220,000 and accumulated depreciation of $30,000. It received in exchange from Xavi Company a machine with a fair value of $200,000. Iniesta also paid cash of $20,000 in the exchange. Xavi’s machine has a book value of $190,000. What amount of gain or loss should Iniesta recognize on the exchange assuming the transaction lacks commercial substance? i know the answer, but please explain.
Flat Tire Inc. exchanged equipment for three pickup trucks. The book value and fair value of...
Flat Tire Inc. exchanged equipment for three pickup trucks. The book value and fair value of the equipment given up were $40,000 (original cost of $75,000 less accumulated depreciation of $35,000) and $43,000, respectively. 1. Assume that Flat Tire Inc. paid $15,000 in cash and the exchange has commercial substance, at what amount will Flat Tire, Inc. value the pickup trucks? a. $67,000 b.. $75,000 c. $58,000 d. $43,000 2. Assume that Flat Tire Inc. paid $15,000 in cash and...
​​​​​​ In a transaction with commercial substance, April Co. exchanged an old machine costing $19.800 with...
​​​​​​ In a transaction with commercial substance, April Co. exchanged an old machine costing $19.800 with Accumulated Depreciation of $10,400 for a new machine with a market value of $19,100 and a cash payment of $6,010. What is the book value of the old machine? What is the recognized gain on the exchange? Provide a journal entry to record the exchange. Assume that in the scenario in Concept Chest 8 the cash payment was $10,800. What is the loss on...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT