For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (Credi 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 O for the amounts. List all debit entries before credit entries.)
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- Holyfield Corporation wishes to exchange a machine used in its operations. Holyfield has received the following offers from other companies in the industry. 1. Dorsett Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.) 2. Winston Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. Liston Company offered to exchange a similar machine, but wanted $3,000 in addition to Holyfield’s machine. (The exchange has commercial substance for both parties.) In addition, Holyfield contacted Greeley Corporation, a dealer in machines. To obtain a new machine, Holyfield must pay $93,000 in addition to trading in its old machine. Holyfield Dorsett Winston Liston Greeley Machine cost $160,000 $120,000 $152,000 $160,000 $130,000 Accumulated depreciation 60,000 45,000 71,000 75,000 –0– Fair value 92,000 69,000…Holyfield Corporation wishes to exchange a machine used in its operations. Holyfield has received the following offers from other companies in the industry. 1. Dorsett Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.) 2. Winston Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. Liston Company offered to exchange a similar machine, but wanted $3,000 in addition to Holyfield’s machine. (The exchange has commercial substance for both parties.) In addition, Holyfield contacted Greeley Corporation, a dealer in machines. To obtain a new machine, Holyfield must pay $93,000 in addition to trading in its old machine. Holyfield 0Dorsett0 0Winston0 0Liston0 0Greeley0 Machine cost $160,000 $120,000 $152,000 $160,000 $130,000 Accumulated depreciation 60,000 45,000 71,000…Sheridan Corporation wishes to exchange a machine used in its operations. Sheridan has received the following offers from other companies in the industry. 1. Skysong Company offered to exchange a similar machine plus $26,220. (The exchange has commercial substance for both parties.) Concord Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. Marigold Company offered to exchange a similar machine, but wanted $3,420 in addition to Sheridan's machine. (The exchange has commercial substance for both parties.) In addition, Sheridan contacted Swifty Corporation, a dealer in machines. To obtain a new machine, Sheridan must pay $106,020 in addition to trading in its old machine. Sheridan Skysong Concord Marigold Swifty Machine cost $182,400 $136,800 $173,280 $182,400 $148,200 Accumulated depreciation 68,400 51,300 80,940 85,500 -0- Fair value 104,880 78,660 104,880 108,300 210,900 For each of the four independent situations, prepare the…
- Sheffield Corporation wishes to exchange a machine used in its operations. Sheffield has received the following offers from other companies in the industry. 2. 3. Tamarisk Company offered to exchange a similar machine plus $30,820. (The exchange has commercial substance for both parties) Vaughn Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) Bramble Company offered to exchange a similar machine, but wanted $4,020 in addition to Sheffield's machine. (The exchange has commercial substance for both parties.) In addition, Sheffield contacted Sunland Corporation, a dealer in machines. To obtain a new machine, Sheffield must pay $124,620 in addition to trading in its old machine. Machine cost Accumulated depreciation Fair valut Sheffield $214,400 80,400 123,280 Tamarisk Vaughn Bramble $160,800 $203,680 $214,400 60,300 95.140 100,500 92,460 123,280 127,300 Sunland $174.200 -0- 247,900 For each of the four independent situations,…Sheridan Corporation wishes to exchange a machine used in its operations. Sheridan has received the following offers from other companies in the industry. 1. Skysong Company offered to exchange a similar machine plus $26,220. (The exchange has commercial substance for both parties.) 2. Concord Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. Marigold Company offered to exchange a similar machine, but wanted $3,420 in addition to Sheridan's machine. (The exchange has commercial substance for both parties.) In addition, Sheridan contacted Swifty Corporation, a dealer in machines. To obtain a new machine, Sheridan must pay $106,020 in addition to trading in its old machine. Sheridan Skysong Concord Marigold Swifty Machine cost $182,400 $136,800 $173,280 $182,400 $148,200 Accumulated depreciation 68,400 51,300 80,940 85,500 -0- Fair value 104,880 78,660 104,880 108,300 210,900 For each of the four independent situations, prepare…Metro Inc. trades its used machine for a new model at Denver Co. The used machine has a book value of $42,000 (cost $64,000) and a fair value of $50,000. Metro receives $5,000 cash from Denver. A) Prepare the necessary journal entry by Metro to record this exchange. Assume the exchange has no commercial substance. B) Prepare the necessary journal entry by Metro to record this exchange. Assume the exchange has commercial substance.
- Mott Company purchases a machine from Janelle Company. Installation of the machine requires specialized knowledge that Mott Company does not possess. Janelle Company regularly includes installation as part of its sales contracts. The machine has a stand-alone price of $50,000, and the value of the installation is estimated to be $5,000. Mott agrees to purchase the machine for $50,000. How much of the contract price should be allocated to the machine and installation respectively?AGI software inc entered into a $250,000 contract with mcdonald company to transfer a software license, perform the related installation service and provide a tech support for three-year period. AGI sells the license to the software, installation service, and tech support as a bundle of product for a lump-sum price. the installation service and tech support could be performed by other entities and there is a ready market for those services. the stand-alone prices for software, installation service, and tech support service were 160,000 20,000 and 30,000 per year (i.e., total of 90,000 for three years) respectively. The contract was finalized on march 1 2020. AGI delivered the software license on april 1 2020 when its title was transferred to mcdonald. AGI completed installation on may 15 2020 at which point the tech support service will begin covering a period of three years. Upon installation of software on may 15, mcdonald paid for the software, installation service, and one-year…Goodman Company acquired a truck from Harmes Company in exchange for a machine. The exchange is determined to have commercial substance. The machine cost $30,000, has a book value of $6,000, and has a market value of $8,500. The truck has a cost of $12,000 and a book value of $8,000 on Harmes’ books. Goodman agrees to pay $500 to complete the exchange.
- Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a very similar machine. In addition, Wolf paid $6,000 as part of the exchange. Wolf should recognize and gain or loss of what amount?Foremost Manufacturing wants to buy $50,000 of sheet metal from Ore Industries on credit. Before agreeing to the sale, Ore decides to evaluate Foremost’s financial status. Of the following potential findings, which would lead Ore to refuse to sell the metal on credit? Foremost’s current liabilities are $450,000 and its current assets are $475,000. Foremost’s accounts receivable are $22,000 and its accounts payable are $21,000. Foremost’s current assets are $450,000 and its current liabilities are $475,000. Foremost’s accounts payable are $22,000 and its accounts receivable are $21,000.Huling Associates plans to transfer $300,000 of accounts receivable to Mitchell Inc. in exchange for cash. Huling has structured the arrangement so that it retains substantially all the risks and rewards of ownership but shifts control over the receivables to Mitchell. Assuming all other criteria are met for recognizing the transfer as a sale, how would Huling account for this transaction under IFRS? Under U.S. GAAP?