Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel located farther from residential areas.,

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel located farther from residential areas., Tinsley carried the land at its original cost of $62,500. According to an independent appraisal, the land currently is worth $150,000. Tinsley paid $21,000 in cash to complete the transaction. Required: 1. What is the fair value of the new parcel of land received by Tinsley assuming the exchange has commercial substance? 2. Prepare the journal entry to record the exchange assuming the exchange has commercial substance. 3. Prepare the journal entry to record the exchange assuming the exchange lacks commercial substance. 4. Prepare the journal entry to record the exchange except that Tinsley received $30,000 in the exchange, and 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

Cost Accounting Traditions and Innovations

Authors: Barfield Jesse, Raiborn Cecily, Kinney Michael

4th edition

324026455, 978-0324026450

More Books

Students also viewed these Accounting questions

Question

What is phishing and how might it affect a legitimate business?

Answered: 1 week ago

Question

explain how psychosocial risks can be prevented or managed;

Answered: 1 week ago