BUSINESS COLLEGE

Kerry, Inc., exchanged land and cash of $8,900 for equipment. The land had a book value of $64,000 and a fair value of $69,900. Required:
Prepare the journal entry to record the exchange. Assume the exchange has commercial substance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answers

Answer 1
Answer:

Answer:

Explanation:

The journal entry is shown below:

Equipment A/c Dr $78,800

    To Gain on exchange A/c  $5,900                      

    To Land A/c $64,000

    To Cash A/c $8,900

(Being the exchange is recorded and the remaining balance is credited to the gain on exchange account)

The equipment value is computed below:

= Fair value + exchange value

= $69,900 + $8,900

= $78,800


Related Questions

COLLEGE

The corporate form of business (A) was first allowed in the State of New York around 1811 and is considered to be an American creation.
(B) was first known and used by the Greeks and then spread through the Romans to England.
(C) was not known until the advent of the Industrial Revolution.
(D) is a relatively new concept developed shortly after the Great Depression.

Answers

Answer: (B) was first known and used by the Greeks and then spread through the Romans to England.

Explanation:

A corporate business is a type of business that operates as a legal entity, but run by board of directors.

A legal entity in this context mean the business can legally sue and be sued, incur debts, pay debts, enter into agreement or contracts.

A corporate business is viewed as an individual with legal rights except for some few limitations.

Few advantages of a corporate business includes:

• Raising money: money can be raised through issuing of stocks, selling shares, in order to allow expansion.

• Transfer of ownership: the business can be sold or passed to another under proper documentation.

•It is a life business: meaning the business can outlive their original founders.

The first American corporate business started in the 1970s

HIGH SCHOOL

For the year ending December 31, Beard Clinical Supplies Co. mistakenly omitted adjusting entries for (1) $7,620 of unearned revenue that was earned, (2) earned revenue that was not billed of $10,480, and (3) accrued wages of $5,950. Indicate the combined effect of the errors on (a) revenues, (b) expenses, and (c) net income.

Answers

Answer:

See explanation section

Explanation:

Since Beard Clinical Supplies Co. omitted adjusting entries that leads to either decrease or increase in the revenues, expenses, and net income.

Transactions 1 and 2 are related to Revenue.

Transaction 3 is related to Expenses.

All transactions are related to Net Income.

Journal entry will help to determine the effect.

Transaction - 1: Unearned Revenue (Debit) - $7,620

Service Revenue (Credit) - $7,620

Transaction - 2: Accounts Receivable (Debit) - $10,480

Service Revenue (Credit) - $10,480

Transaction - 3: Wages expense (Debit) - $5,950

Wages Payable (Credit) - $5,950

A) Revenue = Transaction (1 + 2) = $7,620 + 10,480 = $18,100 was missing. It means revenues were understated (decreased) by $18,100.

B) Expenses = Transaction 3 = $5,950. It was understated also.

C) Net Income = $18,100 - 5,950 = $12,150. Therefore, Net income was also understated.

COLLEGE

Fuente, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $ 950 2 1,180 3 1,400 4 2,140 a. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4?

Answers

Answer:

$6,225.08

Explanation:

The computation of the future value of these cash flows in year 4 is shown below:

= Year 1 cash flow × (1 + interest rate)^year + Year 2 cash flow × (1 + interest rate)^year + Year 3 cash flow × (1 + interest rate)^year + Year 4 cash flow × (1 + interest rate)^year

= $950 × 1.08^3 + $1,180 × 1.08^2 + $1,400 × 1.08^1 + $2,140

= $950 × 1.259712  +  $1,180 × 1.1664  + $1,400 × 1.08 + $2,140

= $1,196.7264  + $1,376.352  + $1,512  + $2,140

= $6,225.08

COLLEGE

A copy machine acquired on July 1 at a cost of $1,450 has an estimated useful life of four years. Assuming that it will have a residual value of $250, determine the depreciation for the first year by the double-declining-balance method. Round your answer to two decimal places.

Answers

Answer:

Depreciation after first year will be $725

Explanation:

We have given cost of the machine = $1450

Life of the the machine = 4 year

Rate of depreciation will be equal to %

Now according to double-declining-balance method rate of depreciation will be double

So rate of depreciation will be = 2×25 = 50%

So depreciation after first year will be =

 

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