Question

In: Accounting

Current Attempt in Progress Ivanhoe Corporation wishes to exchange a machine used in its operations. Ivanhoe...

Current Attempt in Progress

Ivanhoe Corporation wishes to exchange a machine used in its operations. Ivanhoe has received the following offers from other companies in the industry.

1. Shamrock Company offered to exchange a similar machine plus $28,520. (The exchange has commercial substance for both parties.)
2. Bridgeport Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3. Indigo Company offered to exchange a similar machine, but wanted $3,720 in addition to Ivanhoe’s machine. (The exchange has commercial substance for both parties.)


In addition, Ivanhoe contacted Sweet Corporation, a dealer in machines. To obtain a new machine, Ivanhoe must pay $115,320 in addition to trading in its old machine.

Ivanhoe

Shamrock

Bridgeport

Indigo

Sweet
Machine cost $198,400 $148,800 $188,480 $198,400 $161,200
Accumulated depreciation 74,400 55,800 88,040 93,000 –0–
Fair value 114,080 85,560 114,080 117,800 229,400

1. Ivanhoe Corporation

Shamrock Company

2.

Ivanhoe Corporation

Bridgeport Company

3.

Ivanhoe Corporation

Indigo Company

4.

Ivanhoe Corporation

Sweet Company

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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