Larkspur Ltd. traded a used truck (cost $30,200, accumulated depreciation $27,180, fair value $1,950) for a new truck. Larkspur did look up the value of its used truck and determined its fair value at the date of the trade is $1,950. The list price of the new truck is $35,700 and the trade-in allowance given on the trade was $4.970. If Larkspur paid $30,730, what should be the amount used as the cost of the new truck?
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- Windsor Ltd. traded a used truck (cost $31,100, accumulated depreciation $27,990, fair value $1,720) for a new truck. Windsor did look up the value of its used truck and determined its fair value at the date of the trade is $1,720. The list price of the new truck is $36,530 and the trade-in allowance given on the trade was $4,830. If Windsor paid $31,700, what should be the amount used as the cost of the new truck? The cost of the new truck Prepare Windsor's entry to record the exchange. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Vehicles Accumulated Depreciation - Vehicles Loss on Disposal of Vehicles Vehicles 33420 Cash Debit 33420 27990 1390 Credit 31100 31700Grouper Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080 plus trade-in, f.o.b. factory. Grouper Inc. paid $10,080 cash and traded in used equipment. The used equipment had originally cost $78,120; it had a book value of $52,920 and a secondhand fair value of $60,228, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,386. Assuming the same facts as in (a) except that fair value information for the assets exchanged is not determinable, prepare the general journal entry to record this transaction. (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.)Grouper Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080 plus trade-in, f.o.b. factory. Grouper Inc. paid $10,080 cash and traded in used equipment. The used equipment had originally cost $78,120; it had a book value of $52,920 and a secondhand fair value of $60,228, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,386. Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance. (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
- Sunland Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $10,080 plus trade-in, f.o.b.factory. Sunland Inc. paid $10,080 cash and traded in used equipment. The used equipment had originally cost $78,120; it had a book value of $52,920 and a secondhand fair value of $60,228, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,386. (a) Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance. (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 O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit CreditWillis Company trades in a printing press for a newer model. The cost of the old printing press was $62,000, and accumulated depreciation up to the date of the trade - in is $46,000. The company also pays $45,000 cash for the newer printing press. The fair market value of the newer printing press is $70,000. The journal entry to acquire the new printing press will required a debit to Printing Press for: A. $45,000 B. $108,000. C. $70,000. D. $62,000Ashbrook Inc. has negotiated the purchase of a new piece of automatic equipment at a price of $8,000 plus trade-in, f.o.b. factory. Ashbrook Inc. paid $8,000 cash and traded in used equipment. The used equipment had originally cost $62,000; it had a book value of $42,000 and a secondhand fair value of $47,800, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of $1,100. Instructions a. Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance. b. Assuming the same facts as in (a) except that fair value information for the assets exchanged is not determinable, prepare the general journal entry to record this transaction.
- HOT Company exchanges an automobile machine with a carrying amount of $135,000 ( original cost , $550,000) for a molding machine owned by Water Company. The molding machine is carried in Water's Company books at a cost of $240,000 with an accumulated depreciation of $83,000 at the time of exchange. Assume that the fair values of the automobile and the molding machine are $145,000 and $150,000, respectively. In addition, HOT Company paid $5,000 to Water Company to complete the transaction. How much is the gain or loss on the exchange to be recognized by Water Company?Acme Corp. entered into an exchange transaction with XYZ Co. Acme gave XYZ used production equipment and $5,000. In return, Acme received two used vehicles. The production equipment Acme gave up related to a discontinued product and had been idle for the previous three months. The equipment cost Acme $180,000 and depreciation of $150,000 had been recorded at the time of the exchange. Acme had attempted to sell the equipment but was unable to locate a buyer until XYZ proposed the current exchange. The vehicles Acme received will be used in current operations. Acme has needed these vehicles for some time but due to cash flow concerns have not been able to purchase these type vehicles. The company has relied on rentals to carry out the company’s needs. Acme has determined, based on market sources, fair value estimates for each of the vehicles. Vehicle 1’s fair value estimate is $15,000 and Vehicle 2’s fair value estimate is $30,000. Acme’s controller, Chuck Hayes, has never dealt…On October 6, 2023, Western Farms Co. traded in an old tractor for a new one, receiving a $77,000 trade-in allowance and paying the remaining $183,000 in cash. The old tractor cost $228,000, and straight-line depreciation of $124,000 had been recorded as of October 6, 2023. Assume the fair value of the new tractor was equal to the trade-in allowance of the old tractor plus the cash paid. Required: a. What was the book value of the old tractor? Book value b. What is the gain or loss on the exchange?
- Meeker Inc. trades its used machine for a new model at Grand Inc. The used machine has a book value of $8,000 (original cost of $12,000) and a fair value of $4,000. The new model lists for $15,000. Meeker gives Grand a trade-in allowance of $7,000 for the used machine, $3,000 more than its fair value. Prepare a journal entry for Meeker, assuming commercial substance.Brown Company contracts with Sebastian Company to exchange refrigerated trucks. Brown Company will trade three SMC trucks for four DROF trucks owned by Sebastian Company. The trucks are approximately the same age and have the same remaining useful lives. The fair value of the SMC trucks is $51,000 with a book value of $38,000 (cost $65,000 less $27,000 accumulated depreciation). The DROF trucks have a fair value of $66,000 and Brown Company gives $15,000 in cash (paid) in addition to the SMC trucks. Assuming the exchange lacks commercial substance, what would be the value of the new DROF trucks? O $13,000 O $53,000 O $81,000 O $66,000 Question 15 Brown Company contracts with Sebastian Company to exchange refrigerated trucks. Brown Company will trade three SMC trucks for four DROF trucks owned by Sebastian Company. The trucks are approximately the same age and have the same remaining useful lives. The fair value of the 1.000.000 for $45.000 less $27.000 accumulated depreciation). The…USE THE FOLLOWING INFORMATION: The following information regarding the exchange is available: Motown Corporation trades in a delivery vehicle for a new delivery vehicle. Assume the transaction has commercial substance. Cost of Motown's vehicle (old) $ 59,000 Accumulated Depreciation - Motown's vehicle (old) $ 2,200 Fair value Motown's vehicle (old) $ 39,000 List price of new vehicle (new) $ 61,000 Trade in allowance for Motown's vehicle (old) $ 38,000 26.) Compute the basis of the new vehicle to be recorded on Motown's books.