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How would the transaction in BE23-11 be recorded if the individual shareholder only owned 40% of the shares of each

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How would the transaction in BE23-11 be recorded if the individual shareholder only owned 40% of the shares of each company? Assume that there is independent evidence to support the value of the computer software.
In BE Textile manufacturer Peterson Corp. exchanges computer software having a carrying amount of $11,000 with the real estate company Frederick Corp. The software that is received in exchange from Frederick Corp. has a carrying amount of $15,100, performs different functions, and has a fair value of $20,800. Both companies are 100% owned by the same individual and since they are closely held companies they both follow
Discuss and prepare journal entries. Use the decision tree in Illustration 23-5 to explain the reasoning for your answer.

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If the shareholder owned only 40 there is a presumption …View the full answer


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Saud Ur Rehman
Evaluating manufacturing processes by designing and conducting research programs; applying knowledge of product design, fabrication, assembly, tooling, and materials; conferring with equipment vendors; soliciting observations from operators. Developing manufacturing processes by studying product requirements; researching, designing, modifying, and testing manufacturing methods and equipment; conferring with equipment vendors. Keeping equipment operational by coordinating maintenance and repair services; following manufacturer's instructions and established procedures; requesting special service.
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Intermediate Accounting

Intermediate Accounting

ISBN: 978-0470161012

9th Canadian Edition, Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.

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Question Posted: August 23, 2015 09:14:50
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