Reference no: EM132794890

Questions -

Q1: A company purchased a truck by issuing an 80,000, 4-year, zero interest bearing note. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.

Q2: Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $315,000. The estimated fair values of the assets are land $60,000, building $220,000, and equipment $80,000. At what amounts should each of the three assets be recorded?

Q3: Fielder Company obtained land by issuing 2,000 shares of its $10 par value ordinary shares. The land was recently valuated at $85,000. The ordinary shares are actively traded at $40 per share. Prepare the journal entry to record the acquisition of the land.

Q4: Navajo ASA traded a used truck (cost €20,000, accumulated depreciation € 18,000) for a small computer worth €3,300. Navajo also paid €500 in the transaction. Prepare the journal entry to record the exchange.

Q5: Slaton Ltd. traded a used truck for a new truck. The used truck cost 20,000 and has accumulated depreciation of 17,000. The new truck is worth 35,000. Slaton also made a cash payment of 33,000. Prepare Slaton's entry to record the exchange.

Q6: Rialto Group received a grant from the government of 100,000 to acquire  500,000 of delivery equipment on January 2, 2019. The delivery equipment has a useful life of 5 years. Rialto uses the straight-line method of depreciation.

The delivery equipment has a zero residual value.

a. If Rialto Group reports the grant as a reduction of the asset, answer the following questions:

1. What is the carrying amount of the delivery equipment on the statement of financial position at December 31, 2019?

2. What is the amount of depreciation expense related to the delivery equipment in 2020?

3. What is the amount of grant revenue reported in 2019 on the income statement?

b. If Rialto Group reports the grant as deferred grant revenue, answer the following questions:

1. What is the balance in the deferred grant revenue account at December 31, 2019?

2. What is the amount of depreciation expense related to the delivery equipment in 2020?

3. What is the amount of grant revenue reported in 2019 on the income statement?