Jones Corporation purchased some land, buildings, and machinery, for a total cash price of $306,000. At...
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Jones Corporation purchased some land, buildings, and machinery, for a total cash price of $306,000. At the date of the purchase these items were being carried on the books of the seller as follows: land, $90,000, building, $240,000, and machinery, $120,000. Just prior to the purchase, Jones Corporation had employed a valuation specialist to appraise the assets. The appraisal determined the following values land, $75,000; building, $87,000, and machinery, $183,000. Case B: Marshall Company exchanges a machine that cost $100,000 and has accumulated depreciation of $64,000 for a similar machine. Marshall also receives $750 in the exchange. The fair market value of the old asset is $18,750. The fair market value of the new asset is $18,000. There is commercial substance to the transaction. Required: For each case, provide the journal entry for the transaction (i.e., purchase or exchange). Clearly identify the individual assets acquired or exchanged in the journal entry titles (e.g., PPE- machine, PPE- building, PPE- new asset, etc.) (6 points each case) Jones Corporation purchased some land, buildings, and machinery, for a total cash price of $306,000. At the date of the purchase these items were being carried on the books of the seller as follows: land, $90,000, building, $240,000, and machinery, $120,000. Just prior to the purchase, Jones Corporation had employed a valuation specialist to appraise the assets. The appraisal determined the following values land, $75,000; building, $87,000, and machinery, $183,000. Case B: Marshall Company exchanges a machine that cost $100,000 and has accumulated depreciation of $64,000 for a similar machine. Marshall also receives $750 in the exchange. The fair market value of the old asset is $18,750. The fair market value of the new asset is $18,000. There is commercial substance to the transaction. Required: For each case, provide the journal entry for the transaction (i.e., purchase or exchange). Clearly identify the individual assets acquired or exchanged in the journal entry titles (e.g., PPE- machine, PPE- building, PPE- new asset, etc.) (6 points each case)
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Case 1 Jones Corporation Purchase Transaction Given values Land book value ... View the full answer
Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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