Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P10.10 (LO 3) (Nonmonetary Exchanges) During the current year, Marshall Construction trades an old crane that has a book value of $90,000 (original cost $140,000

image text in transcribed
image text in transcribed
P10.10 (LO 3) (Nonmonetary Exchanges) During the current year, Marshall Construction trades an old crane that has a book value of $90,000 (original cost $140,000 less accumulated depreciation $50,000) for a new crane from Brigham Manufacturing Co. The new crane cost Brigham $165,000 to manufacture and is classified as inventory. The following information is also available. Marshall Const. Brigham Mfg.Co. 82,000 $200,000 Fair value of old crane Fair value of new crane Cash paid Cash received 118,000 118,000 Instructions a. Assuming that this exchange is considered to have commercial substance, prepare the journal entries on the books of (1) Marshall Construction and (2) Brigham Manufacturing b. Assuming that this exchange lacks commercial substance for Marshall, prepare the journal entries on the books of Marshall Construction. c. Assuming the same facts as those in (a), except that the fair value of the old crane is 9 000 and the pooh oid i 100 Ann Aa 1 Q Q Marshall Const. Brigham Mfg.Co. 82,000 $200,000 Fair value of old crane Fair value of new crane Cash paid Cash received 118,000 118,000 Instructions a. Assuming that this exchange is considered to have commercial substance, prepare the journal entries on the books of (1) Marshall Construction and (2) Brigham Manufacturing b. Assuming that this exchange lacks commercial substance for Marshall, prepare the journal entries on the books of Marshall Construction. c. Assuming the same facts as those in (a), except that the fair value of the old crane is $98,000 and the cash paid is $102,000, prepare the journal entries on the books of (1) Marshall Construction and (2) Brigham Manufacturing. d. Assuming the same facts as those in (b), except that the fair value of the old crane is $97,000 and the cash paid $103,000, prepare the journal entries on the books of (1) Marshall Construction and (2) Brigham Manufacturing

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

Introduction To Accounting And Finance

Authors: Geoff Black

2nd Edition

0273711628, 978-0273711629

More Books

Students also viewed these Accounting questions