ACC 304 Quiz 3 Chapter 10.docx - Question 1 Correct A...

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Question 1 Correct. A machine cost $600,000, has annual depreciation of $100,000, and has accumulated depreciation of $450,000 on December 31, 2014. On April 1, 2015, when the machine has a fair value of $137,500, it is exchanged for a machine with a fair value of $675,000 and the proper amount of cash is paid. The exchange had commercial substance. The gain to be recorded on the exchange is $25,000 $75,000 $0 $12,500
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Don't show me this message again for the assignment Click if you would like to Show Work for this question: Open Show Work Solution Close Question 1 $137,500 – ($600,000 – $475,000) = $12,500. Question 2 Correct. Dodson Company traded in a manual pressing machine for an automated pressing machine and gave $24,000 cash. The old machine cost $279,000 and had a net book value of $213,000. The old machine had a fair value of $180,000. Which of the following is the correct journal entry to record the exchange? Equipment 369,000 Accumulated Depreciation 66,000 Equipment 279,000 Cash 24,000 Equipment 204,000 Equipment 120,000 Cash 24,000
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Equipment 204,000 Loss on Disposal 33,000 Accumulated Depreciation 66,000 Equipment 279,000 Cash 24,000 Cash 24,000 Equipment 180,000 Loss on Disposal 33,000 Accumulated Depreciation 66,000 Equipment 303,000 Solution Close Question 2 Equipment = $180,000 + $24,000; Loss: $213,000 – $180,000 = 33,000. Question 3 Correct. Woodson Company, a company who uses IFRS reporting standards, has identified a group of plant assets for disposal. On January 1, 2014, the carrying value of these assets was $14.5 million. The assets were revalued to $13.5 million on January 5, 2014, when they were identified as property for the disposal group. In addition, Woodson thinks that it will cost $1.5 million to sell these assets. What
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