Sparta Company exchanged machinery with an appraised value of $4,680,000 a recorded cost of $7,200,000 and...

Sparta Company exchanged machinery with an appraised value of $4,680,000 a recorded cost of $7,200,000 and accumulated depreciation of $3,600,000 with Delphi Corporation for machinery Delphi owns. The machinery has an appraised value of $4,520,000 a recorded cost of $8,640,000 and accumulated depreciation of $4,752,000. Delphi also gave Sparta $160,000 in the exchange.

A. Prepare the entries on both companies' books assuming that the exchange had commercial substance. (Round all computations to the nearest dollar.)

B. Prepare the entries on both companies' books assuming that the exchange lacked Commercial substance. (Round all computations to the nearest dollar.)

Expert Solution

ekkarill92 answered 1 year ago

Problem 145 Hodge Co. exchanged Building 24 which has an appraised value of $4,821,000, a cost...

Problem 145 Hodge Co. exchanged Building 24 which has an appraised value of $4,821,000, a cost of $7,584,000, and accumulated depreciation of $3,588,000 for Building M belonging to Fine Co. Building M has an appraised value of $4,531,000, a cost of $9,034,000, and accumulated depreciation of $4,714,000. The correct amount of cash was also paid. Assume depreciation has already been updated. Prepare the entries on both companies' books assuming the exchange had no commercial substance. (Credit account titles are automatically...

Bob's Inc. exchanged Building 24 which has a value of $6,400,000, a cost of $10,120,000, and...

Bob's Inc. exchanged Building 24 which has a value of $6,400,000, a cost of $10,120,000, and accumulated depreciation of $4,800,000 for Building B belonging to Bro Company Building B has an appraised value of $6,016,000, a cost of $12,040,000, and accumulated depreciation of $6,336,000. Bro paid Bob's $384,000 to complete the exchange. Prepare the entries on both companies' books assuming the exchange had no commercial substance. Also prepare the journal entries on both companies’ books assuming the exchange had commercial...

A problem of interest is the relationship between the appraised value of a property and its...

A problem of interest is the relationship between the appraised value of a property and its sale price. The sale price for any given property will vary depending on the price set by the seller, the strength of appeal of the property to a specific buyer, and the state of the money and real estate markets. We want to examine the relationship between the mean sale price E(y) of a property and the variables: appraised land value of the property,...

1A) On January 1, 2014, Garr Company acquired machinery at a cost of $320,000 The machinery...

1A) On January 1, 2014, Garr Company acquired machinery at a cost of $320,000 The machinery was being depreciated using the double declining balance method. It had an estimated useful life of 8 years and no residual value. At the beginning of 2016, Garr changed to the straight-line method of depreciation. Prepare any journal entry required to account for this change. 1B) Gundrum Inc. purchased equipment on January1, 2012 for $850,000. The equipment was expected to have a useful life...

On July 1, 2016, Crane Company sells machinery for $210500. The machinery originally cost $585000, had...

On July 1, 2016, Crane Company sells machinery for $210500. The machinery originally cost $585000, had an estimated 5-year life and an expected salvage value of $60000. The Accumulated Depreciation account had a balance of $367500 on January 1, 2016, using the straight-line method. The gain or loss on disposal is $45500 gain. $97000 gain. $22750 loss. $97000 loss.

Yellow School Bus Company had machinery that had originally cost $328,000. The machinery was three years...

Yellow School Bus Company had machinery that had originally cost $328,000. The machinery was three years old and had been depreciated using the double-declining-balance method, over a five-year useful life with a residual value of $24,000. Answer each of the following independent questions: A. If the company sold the machinery for $140,000, prepare a journal entry to record the sale. B. If the company sold the machinery for $64,000, prepare a journal entry to record the sale.

4. Scheuller Company had machinery that had originally cost $246,000. The machinery was three years old...

4. Scheuller Company had machinery that had originally cost $246,000. The machinery was three years old and had been depreciated using the double-declining-balance method, over a five-year useful life with a residual value of $18,000. Answer each of the following independent questions: Required: If the company sold the machinery for $105,000, prepare a journal entry to record the sale. If the company sold the machinery for $48,000, prepare a journal entry to record the sale. B. Discuss the following: 1....

1. On July 6, Zonker Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:

Presented below is information related to Zonker Company.1. On July 6, Zonker Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is: Zonker Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $168 per share on the date of the purchase of the property.2. Zonker Company expended the following amounts in cash between July 6 and December 15, the date...

Wember Company acquired a subsidiary company on December 31, 2012, and recorded the cost of the...

Wember Company acquired a subsidiary company on December 31, 2012, and recorded the cost of the intangible assets it acquired as follows: Patent $100,000 Trade name 80,000 Goodwill 150,000 The patent is being amortized by the straight-line method over an expected life of 10 years with no residual value. Amortization has been recorded for the current year. The trade name was considered to have an indefinite life. Because of the success of the subsidiary in the past, Wember has not...

sparta corp. has a prospective project with an irr of 7.25%. its cost of preferred equity,...

sparta corp. has a prospective project with an irr of 7.25%. its cost of preferred equity, cost of common equity, and post-tax cost of debt are 7%, 9%, and 4%, respectively, and sparta raises equal amounts of funding from all these three sources. choose the best statement: A- the project’s required rate of return must be greater than 7.25%. B- the project’s net present value (npv) must be $0. C- the project’s npv must be negative. D- the project’s npv...

Question