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On September 12, Cheyenne Company agreed to an exchange of assets with another company. Cheyenne gave up a machine with an original cost of $50,100. $30,500 in accumulated depreciation had been recorded on this machine over the course of Cheyenne’s ownership. Cheyenne determined that the machine being given up had a fair value of $18,500. Cheyenne also paid $7,600 in cash. Assume that Cheyenne follows IFRS and that the transaction has commercial substance. Prepare the journal entry to record the asset exchange on Cheyenne’s books.

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Tod Thiel
Tod ThielLv2
28 Sep 2019

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Flounder Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Flounder Corporation gave the machine plus $469 to Culver Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines.

Flounder Corp.
(Old Machine)

Culver Co.
(New Machine)
Machine cost $400 $373
Accumulated depreciation 193 –0–
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587

For each company, prepare the necessary journal entry to record the exchange. (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.)

On September 3, 2018, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows: Robers’ Asset Phifer’s Asset Original cost $ 145,000 $ 165,000 Accumulated depreciation 75,000 83,000 Fair value 82,500 72,500 To equalize the exchange, Phifer paid Robers $10,000 in cash. Required: Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

QUESTION 1

Use the following information to answer the next (8)questions:

Sparky Inc. is trading a machine which has an original cost of$60,000 and accumulated depreciation of $35,000 for another fixedasset. For each of the following independent scenarios, determinethe the original cost Sparky will report on their balance sheet forthe new asset acquired in the exchange and the gain or loss to berecognized on Sparky's Income Statement for the current year.

*If there is a gain record your answer as a positivenumber; if there is a loss, record your answer in parenthesis ().If there is NO gain or loss, type in NE. Round all answers to thenearest whole dollar. Do not use punctuation marks (dollar signs orcommas) in recording your answers.

New Asset's Original Cost Reported on Sparky's Balance Sheet

Gain/Loss

Recognized by Sparky

1. Sparky received in this exchange a machine with a fair valueof $18,000 and also received $10,000 cash. The exchangelacks commercial substance.

$___________

$__________

2. Sparky paid $8,000 cash and traded the old asset to receive amachine with fair value of $40,000. The transactionlacks commercial substance.

$___________

$___________

3. Sparky exchanged their old asset to receive a machine with afair value of $25,000. Sparky also received $5,000 cash. Thetransaction lackscommercialsubstance.

$___________

$___________

4. Sparky paid $5,100 and exchanged the old asset to receive anew asset with a fair value of $28,000. The exchangehas commercial substance.

$___________

$___________

1. In Scenario #1, determine the original cost of the New Assetthat Sparky will report on their balance sheet as a result of thistransaction. $[Blank_1]

1 points

QUESTION 2

For Scenario #1, determine the gain/loss Sparky will report as aresult of this transaction:

$[Blank_2]

1 points

QUESTION 3

For Scenario #2, determine the original cost of the New Assetthat Sparky will report on their Balance Sheet as a result of thisexchange. $[Blank_3]

1 points

QUESTION 4

For Scenario #2 above, determine the gain/loss that Sparky willreport as a result of this exchange. (*Note: If a gain isindicated, record your answer as a positive number; if a loss isindicated record your answer as a negative number using parenthesis( ), if no gain or loss should be reported, record your answer asNE.)

1 points

QUESTION 5

For Scenario #3, determine the original cost of the New Assetthat Sparky will report on their Balance Sheet as a result of thisexchange. $[Blank_5]

1 points

QUESTION 6

For Scenario #3, indicate the gain/loss Sparky will report as aresult of this exchange.

$[Blank_6]

1 points

QUESTION 7

For Scenario #4, determine the original cost of the New Assetthat Sparky will report on their balance sheet as a result of thisexchange. $[Blank_7]

1 points

QUESTION 8

For Scenario #4, determine the gain/loss that Sparky will reportas a result of this exchange.

(*Note: If a gain is indicated, record your answer as a positivenumber; if a loss is indicated record your answer as a negativenumber using parenthesis ( ), if no gain or loss should bereported, record your answer as NE.)

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