Review Ch. 10 - LOGAN INDUSTRIES Acquisition of Assets 1...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: LOGAN INDUSTRIES Acquisition of Assets 1 and 2 Use appraised values to break-out the lump-sum purchase Description Appraisal Percentage Lump-Sum Value on Books Machinery $ 90,000 90/120 $104,000 $78,000 Office Equipment 30,000 30/120 104,000 26,000 $120,000 Machinery ............................................................... 78,000 Office Equipment ................................................... 26,000 Cash .............................................................. 104,000 Acquisition of Asset 3 Use the cash price as a basis for recording the asset with a discount recorded on the note. Machinery ............................................................... 35,900 Discount on Notes Payable ($40,000 $35,900) ...... 4,100 Cash .............................................................. 10,000 Notes Payable ............................................... 30,000 Acquisition of Asset 4 Since the exchange lacks commercial substance, a gain will be recognized in the proportion of cash received ($10,000/$80,000) times the $16,000 gain (FMV of...
View Full Document

This note was uploaded on 03/28/2010 for the course ACCT 20719 taught by Professor Hall during the Spring '10 term at CSU San Bernardino.

Page1 / 3

Review Ch. 10 - LOGAN INDUSTRIES Acquisition of Assets 1...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online