The following information relates to an exchange of assets by Wharton Company. The exchange lacks commercial substance.

	Old Equipment
	Book Value	Fair Value	Cash Paid
Case I	$75,000	$85,000	$15,000
Case II	$50,000	$45,000	$7,000

For Case II, Wharton records the equipment at $ Answer on its books and gain or (loss) of $ Answer. NB. if reporting a loss, use minus sign in answer.

On January 2, 2015, Deck Inc. purchased machinery with a cost of $10,440,000, a useful life of 10 years and no salvage value. The company uses straight-line depreciation. At December 31, 2015 and December 31, 2016, the company determines that impairment indicators are present. The following information is available for impairment testing at each year end:

  12/31/2015                  12/31/2016

            Fair value less costs to sell                  $9,315,000                  $8,850,000

            Value-in-use                                        $9,350,000                  $8,915,000

           

There is no change in the asset’s useful life or salvage value. The 2016 income statement will report (impairment loss or recovery of impairment loss) Answer of $ Answer

January, 2016, Gems Imperial purchased a mineral mine for $3,400,000 with removable ore estimated by geological surveys at 2,000,000 tons. The property has an estimated value of $200,000 after the ore has been extracted. The company incurred $1,000,000 of development costs preparing the mine for production. During 2016, 500,000 tons were removed and 400,000 tons were sold. What is the amount of depletion that Gems Imperial should expense for 2016?

Answer rating: 100% (QA)

In quention it is given that the exchange lacks commercial substance Then the entry will be as follows New Equipment Dr 45000 Loss on Exchange Dr 1200... View the full answer