Flounder Limited owns 90% of Pharoah Inc. During 2020, Flounder acquired a machine from Pharoah in exchange for its own used machine. Both companies are in the tool-making business. The agreed exchange amount is $2,050, although the transaction is nonmonetary. Pharoah has an original cost of $6,000 and carries its machine on its books at a carrying amount of $1,640, whereas Flounder has an original cost of $7,000 and carries its machine on its books at a carrying amount of $1,910. Neither company has a balance in the Contributed Surplus account relating to previous related-party transactions. Both Flounder and Pharoah follow ASPE.

 

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Using the related-party decision tree answer the following. is the transaction in the normal course of operations? No Related-party bransaction occurs is the change in the ownership tereds in the tem tranded NO N is the amount of the exchange supported by independent dece NO ng ati is the transaction exchange of products of property the al course of options to foc No Det w is the transaction anonmonetary exchange or transf of a nonintary tawactions in the is not per Mess the change amount Using the related-party decision tree answer the following. is the transaction in the normal course of operations? No Related-party bransaction occurs is the change in the ownership tereds in the tem tranded NO N is the amount of the exchange supported by independent dece NO ng ati is the transaction exchange of products of property the al course of options to foc No Det w is the transaction anonmonetary exchange or transf of a nonintary tawactions in the is not per Mess the change amount

Answer rating: 100% (QA)

Answer and Explanation It looks like youve provided a scenario involving a nonmonetary exchange of m... View the full answer