Business, 15.02.2021 20:10 yasmin7740

Cynthia Co. exchanged Building 24 which has an appraised value of $4,800,000, a cost of $7,600,000, and accumulated depreciation of $3,619,000 for Building M belonging to Waterway Co. Building M has an appraised value of $4,560,000, a cost of $9,096,000, and accumulated depreciation of $4,747,000. 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.

Answers: 3

Show answers

Answers

Answer from: igivebirth4170

See the journal entries below.

Explanation:

In the Book of Cynthia Co.

Book value of Building 24 = Cost of Building 24 - Accumulated depreciation of Building 24 = $7,600,000 - $3,619,000 = $3,981,000

Gain on disposal of Building 24 = Building 24 an appraised value of - Book value of Building 24 = $4,800,000 - $3,981,000 = $819,000

Basis for Building M = Building M appraisal value - Gain on disposal of Building 24 = $4,560,000 - $819,000 = $3,741,000

Cash = Accumulated Depreciation of Building 24 + Basis for Building M - Cost of Building 24 - Gain on Disposal of Building 24 = $3,619,000 + $3,741,000 - 7,600,000 - $819,000 = $1,059,000

The journal entries will look as follows:

Accounts Title Debit ($) Credit ($)

Accumulated Depreciation 3,619,000

Building M 3,741,000

Cash 1,059,000

Building 24 7,600,000

Gain on Disposal 819,000

To record the exchange of Building 24 for Building M from Waterway Co.

In the Book of Waterway Co.

Building 24 = Building M cost + Cash - Building M depreciation = $9,096,000 + $1,059,000 - $4,747,000 = $5,408,000

The journal entries will look as follows:

Accounts Title Debit ($) Credit ($)

Accumulated Depreciation 4,747,000

Building 24 5,408,000

Building M 9,096,000

Cash 1,059,000

To record the exchange of Building M for Building 24 from Cynthia Co.

Answer from: Quest

can your question and add a list so i can you out?

Answer from: Quest

Amuscle thats keeping you from having pain.

Another question on Business

Business, 21.06.2019 20:30

In the rbv are defined as the tangible and intangible assets that a firm controls that it can use to conceive and implement its strategies.answers: management policies

Answers: 1

Answer

Business, 21.06.2019 22:00

The market yield on spice grills' bonds is 15%, and the firm's marginal tax rate is 33%. what is their shareholders' required return if the equity risk premium is 4%?

Answers: 1

Answer

Business, 21.06.2019 23:00

What is overdraft protection (odp)? a.) a cheap and easy way to always avoid overdrawing a bank account b.) a service to automatically transfer available funds from a linked account to cover purchases, prevent returned checks and declined items when you don’t have enough money in your checking account at the time of the transaction. c.) an insurance policy sold by banks to prevent others from withdrawing your money d.) a service provided by the government that insures individuals bank deposits up to $250,000

Answers: 2

Answer

Business, 22.06.2019 10:30

Marketing1. suppose the average price for a new disposable cell phone is $20, and the total market potential for that product is $4 million. topco, inc. has a planned market share of 10 percent. how many phones does topco have the potential to sell in this market? 20,0002. use the data from question 3 to calculate topco, inc.'s planned market share in dollars. $400,0003. atlantic car rental charges $29.95 per day to rent a mid-size automobile. pacific car rental, atlantic's main competitor, just reduced prices on all its car rentals. in response, atlantic reduced its prices by 5 percent. now how much does it cost to rent a mid-size automobile from atlantic? $28.45

Answers: 1

Answer

You know the right answer?

Cynthia Co. exchanged Building 24 which has an appraised value of $4,800,000, a cost of $7,600,000,...

Questions