PLEASE LOOK AT ATTACHED FILES FOR QUESTIONS!!!!!!!! Exercise 10-10

On August 1, Blossom, Inc. exchanged productive assets with Blue, Inc. Blossoms asset is referred to below as Asset A, and Blue is referred to as Asset B. The following facts pertain to these assets.

Asset A	Asset B
Original cost	$122,880	$140,800
Accumulated depreciation (to date of exchange)	51,200	60,160
Fair value at date of exchange	76,800	96,000
Cash paid by Blossom, Inc.	19,200
Cash received by Blue, Inc.	19,200

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Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Blossom, Inc. and Blue, Inc. in accordance with generally accepted accounting principles.(Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
Blossom, Inc.s Books
CashAccumulated Depreciation-Machinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)Gain on Disposal of MachineryMachinery (B)
CashGain on Disposal of MachineryMachinery (A)Accumulated Depreciation-Machinery (A)Machinery (B)Accumulated Depreciation-Machinery (B)
Machinery (A)Gain on Disposal of MachineryAccumulated Depreciation-Machinery (A)Accumulated Depreciation-Machinery (B)CashMachinery (B)
Gain on Disposal of MachineryMachinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)Accumulated Depreciation-Machinery (B)Cash
CashMachinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)Accumulated Depreciation-Machinery (B)Gain on Disposal of Machinery
Blue, Inc.s Books
Machinery (B)Accumulated Depreciation-Machinery (B)Gain on Disposal of MachineryCashMachinery (A)Accumulated Depreciation-Machinery (A)
Accumulated Depreciation-Machinery (B)Gain on Disposal of MachineryAccumulated Depreciation-Machinery (A)CashMachinery (B)Machinery (A)
Machinery (B)CashGain on Disposal of MachineryMachinery (A)Accumulated Depreciation-Machinery (B)Accumulated Depreciation-Machinery (A)
Accumulated Depreciation-Machinery (B)Machinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)CashGain on Disposal of Machinery
Gain on Disposal of MachineryMachinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)Accumulated Depreciation-Machinery (B)Cash

LINK TO TEXT

	Your answer is incorrect. Try again.

Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Blossom, Inc. and Blue, Inc. in accordance with generally accepted accounting principles.(Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
Blossom, Inc.s Books
Accumulated Depreciation-Machinery (B)Machinery (B)Gain on Disposal of MachineryCashMachinery (A)Accumulated Depreciation-Machinery (A)
CashMachinery (B)Accumulated Depreciation-Machinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)Gain on Disposal of Machinery
Accumulated Depreciation-Machinery (A)CashGain on Disposal of MachineryMachinery (B)Machinery (A)Accumulated Depreciation-Machinery (B)
Gain on Disposal of MachineryMachinery (B)Accumulated Depreciation-Machinery (B)Machinery (A)CashAccumulated Depreciation-Machinery (A)
Blue, Inc.s Books
Accumulated Depreciation-Machinery (A)Machinery (B)Machinery (A)Accumulated Depreciation-Machinery (B)CashGain on Disposal of Machinery
CashMachinery (B)Gain on Disposal of MachineryMachinery (A)Accumulated Depreciation-Machinery (A)Accumulated Depreciation-Machinery (B)
Gain on Disposal of MachineryMachinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)Accumulated Depreciation-Machinery (B)Cash
Accumulated Depreciation-Machinery (B)CashGain on Disposal of MachineryMachinery (B)Machinery (A)Accumulated Depreciation-Machinery (A)
Gain on Disposal of MachineryMachinery (A)Machinery (B)Accumulated Depreciation-Machinery (A)Accumulated Depreciation-Machinery (B)Cash

The following three situations involve the capitalization of interest.

Situation I

On January 1, 2017, Stellar, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,471,000. It was estimated that it would take 3 years to complete the project. Also on January 1, 2017, to finance the construction cost, Stellar borrowed $4,471,000payable in10annual installments of $447,100, plus interest at the rate of10%. During 2017, Stellar made deposit and progress payments totaling $1,676,625under the contract; the weighted-average amount of accumulated expenditures was $894,200for the year. The excess borrowed funds were invested in short-term securities, from which Stellar realized investment income of $265,300.

What amount should Stellar report as capitalized interest at December 31, 2017?

Capitalized interest

$

Situation II

During 2017, Pearl Corporation constructed and manufactured certain assets and incurred the following interest costs in connection with those activities.

Interest Costs Incurred
Warehouse constructed for Pearls own use	$33,290
Special-order machine for sale to unrelated customer, produced according to customers specifications	9,660
Inventories routinely manufactured, produced on a repetitive basis	8,250

All of these assets required an extended period of time for completion.

Assuming the effect of interest capitalization is material, what is the total amount of interest costs to be capitalized?

The total amount of interest costs to be capitalized

$

Situation III

Martinez, Inc. has a fiscal year ending April 30. On May 1, 2017, Martinez borrowed $10,886,000at11% to finance construction of its own building. Repayments of the loan are to commence the month following completion of the building. During the year ended April 30, 2018, expenditures for the partially completed structure totaled $7,620,200. These expenditures were incurred evenly throughout the year. Interest earned on the unexpended portion of the loan amounted to $707,590for the year.

How much should be shown as capitalized interest on Martinezs financial statements at April 30, 2018?

Capitalized interest on Martinezs financial statements

$

On April 1, 2017, Culver Company received a condemnation award of $533,200cash as compensation for the forced sale of the companys land and building, which stood in the path of a new state highway. The land and building cost $74,400and $347,200, respectively, when they were acquired. At April 1, 2017, the accumulated depreciation relating to the building amounted to $198,400. On August 1, 2017, Culver purchased a piece of replacement property for cash. The new land cost $111,600, and the new building cost $496,000. Prepare the journal entries to record the transactions on April 1 and August 1, 2017.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
April 1
Aug. 1