1. GikSmile Inc. and FunG Co. made exchange of assets with no commercial substance. GikSmile...
80.2K
Verified Solution
Link Copied!
Question
Accounting
1. GikSmile Inc. and FunG Co. made exchange of assets with no commercial substance. GikSmile gave machinery with a book value of $51,000 and a fair value of $70,000. Equipment given by FunG Co. has book value of $72,000 and a fair value of $78,000. GikSmile Co. pays boot of $8,000 to FunG Co. FunG Inc. has the following cost basis for new machinery:
A. 64,615
B. 70,000
C. 72,000
D. 78,000
2. BobCat. traded its old Van for a new sedan and gave $12,000 boot. The transaction had commercial substance. The old van cost $59,000 and had a $41,000 book value and a $32,000 fair value. Which journal entry correctly records the exchange?
A. DR Car 44,000 CR Van 32,000 CR Cash 12,000
B. DR Car 50,000 DR Accumulated depreciation-van 18,000 DR Loss 9,000 CR Van 59,000
C. DR Car 50,000 DR Accumulated depreciation-van 18,000 DR Loss 9,000 CR Van 59,000
D. DR Car 44,000 DR Accumulated depreciation-van 18,000 DR Loss 9,000 CR Van 59,000 CR Cash 12,000
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
