2. On November 30, 2018, CBL decided that it needed to move its offices from Burnaby...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2. On November 30, 2018, CBL decided that it needed to move its offices from Burnaby to Vancouver. Accordingly, it traded its Burnaby land and building for a different land and building located in Vancouver. The appraised value of the Vancouver land was $106,000 while the appraised value of the Vancouver building was $480,000. On this date, the Burnaby land had an appraised value of $145,000 but the value of the Burnaby building was unknown. The transaction lacks commercial substance. Assume that CBL amortizes its buildings on a declining-balance method at a rate of 6% per year, prorated monthly. REQUIRED 1. Prepare all of the relevant journal entries for the above activities. Your entries should include any relevant adjusting journal entry(ies) at December 31, 2018, CBL's year-end. 2. What is meant by "commercial substance" as it pertains to non-monetary transactions? 3. Assume that for item #2, CBL entered the transaction as previously described and that CBL paid an additional $85,000. If the transaction was considered to have commercial substance, what would be the appropriate journal entry? Assume that the appraised value of the Vancouver land is more reliable than the appraised value of the Burnaby land. 2. On November 30, 2018, CBL decided that it needed to move its offices from Burnaby to Vancouver. Accordingly, it traded its Burnaby land and building for a different land and building located in Vancouver. The appraised value of the Vancouver land was $106,000 while the appraised value of the Vancouver building was $480,000. On this date, the Burnaby land had an appraised value of $145,000 but the value of the Burnaby building was unknown. The transaction lacks commercial substance. Assume that CBL amortizes its buildings on a declining-balance method at a rate of 6% per year, prorated monthly. REQUIRED 1. Prepare all of the relevant journal entries for the above activities. Your entries should include any relevant adjusting journal entry(ies) at December 31, 2018, CBL's year-end. 2. What is meant by "commercial substance" as it pertains to non-monetary transactions? 3. Assume that for item #2, CBL entered the transaction as previously described and that CBL paid an additional $85,000. If the transaction was considered to have commercial substance, what would be the appropriate journal entry? Assume that the appraised value of the Vancouver land is more reliable than the appraised value of the Burnaby land.
Expert Answer:
Answer rating: 100% (QA)
ANSWER 1 Investment in shares 530000 Land and building B... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
Posted Date:
Students also viewed these accounting questions
-
What is meant by an account labeled Accrued wages? Would it be on an income statement or a balance sheet?
-
What is meant by automatic monetary adjustments? How do they help to adjust balanceofpayments disequilibria?
-
What is meant by an international monetary system? How can international monetary systems be classified?
-
4. In cells B4:B15, type a yearly salary for each staff member. Format these values as Currency with no decimal places. 5. Calculate the new salary with a 10% increase in column C. 6. Calculate the...
-
Financial information for Forever 18 includes the following selected data (in millions): Required: 1. Calculate earnings per share in 2014 and 2015. Did earnings per share increase in 2015? 2....
-
Draw profit diagrams for the following positions: a. 1050-strike S&R straddle. b. Written 950-strike S&R straddle. c. Simultaneous purchase of a 1050-strike straddle and sale of a 950-strike S&R...
-
The lower-of-cost-or-market method (LCM) is often referred to as a one-way street because under LCM, ending inventory values may be written down to a lower replacement value but are never written up...
-
Data Back-Up Systems has obtained a $10,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. a. How much interest (in dollars) will the firm pay on the 90-day loan? b. Find...
-
Wildhorse Corporation donates equipment and a truck to the community Home Assistance Centre. The equipment had a cost of $107,000, accumulated depreciation to the contribution date of $43,000, and a...
-
SECTION B: ANSWER ANY THREE (3) QUESTIONS QUESTION TWO The following summarized statements of comprehensive income have been prepared for the year ended 31 December 2014 for Gold Reef Holdings and...
-
(Continue from #5) Canyon Buffs expected capital gain rate is closest to: A. 4.096 B. 6.49% C. 8.296 D. 10.0%
-
Enumerate the various application areas of refrigeration.
-
The saturation pressure of liquid water at \(393.38 \mathrm{~K}\) is \(200 \mathrm{kPa}\). Estimate the fugacity of liquid water at \(372.12 \mathrm{~K}\) and \(300 \mathrm{kPa}\). We are given that...
-
Discuss the importance of generalized compressibility chart.
-
What is virial equation of state?
-
How do you explain the significance of virial coefficients?
-
Assuming that math worry (X) predicts the perceived usefulness of statistics (Y), calculate the intercept for the regression equation. How would you interpret this intercept value?
-
A company pledges their receivables so they may Multiple Choice Charge a factoring fee. Increase sales. Recognize a sale. Collect a pledge fee. Borrow money. Failure by a promissory notes' maker to...
-
Some critics argue that having different organizations establish accounting principles is wasteful and inefficient. Instead of mandating accounting standards, each company could voluntarily disclose...
-
The following are operational guidelines and practices that have developed over time for financial reporting. 1. Price-level changes (inflation and deflation) are not recognized in the accounting...
-
Reach Out Card Company Limited reported the following for 2014: net sales revenue $1.2 million; cost of goods sold $750,000; selling and administrative expenses $320,000; gain on disposal of building...
-
Ratliff Corporation produces lawn fertilizer spreaders. Ratliffs income statement shown has been prepared for August of the current year. Instructions: 1. Prepare Ratliffs August income statement...
-
Millard, Inc., sold 68,000 computer printers last year with the following results. Complete each of the following instructions independently of the others. Instructions: 1. Millard projects that it...
-
Total Networks, Inc., reported gross accounts receivable of \($1.2\) billion in 2008 and an allowance for doubtful accounts of \($300\) million. In 2009, the companys gross accounts receivable...
Study smarter with the SolutionInn App