Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and losses as

image text in transcribed
For each of the following independent situations, enter the requested amounts in the associated cells. Record costs and gains as positive values and losses as negative values using a leading minus () sign. Enter amounts in the format xxxxx or xx,xxx. Situation 1: On December 31, Year 1, AS Co. exchanged a used machine for a new machine from LB, Inc. The used machine had a book value of $100,000($120,000 cost $20,000 accumulated depreciation) and a fair value of $90,000. The new machine had a list price of $150,000, and LB gave AS a trade-in allowance of $105,000, with the difference paid in cash. The exchange has commercial substance. On December 1, Year 1, RF, Inc., exchanged a used truck for a new truck from VA Co. The used truck had a book value of $57,500($75,000 cost $17,500 accumulated depreciation) and a fair value of $60,000. In addition to the exchange of the used truck, RF paid VA $8,000. The exchange has commercial substance. On July 1, Year 1, KLK Co. exchanged a used crane for a new crane with ZS Corp. The used crane had a book value of $120,000($225,000 cost $105,000 accumulated depreciation) and a fair value of $125,000. The fair value of the new crane is $110,000. In addition to the exchange of the used crane, ZS paid KLK $15,000. The exchange lacks commercial substance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Justified The Story Of Americas Audit

Authors: Dr. Kelli Ward

1st Edition

195725503X, 978-1957255033

More Books

Students also viewed these Accounting questions