User Account

All Pages

Write a memo to the controller of company a indicating

Assignment Help Accounting Basics
Reference no: EM131118217

1. Nonmonetary Exchanges You has two clients that are considering trading machinery with each other. Although the machines are different from each other, you believe that an assessment of expected cash flows on the exchanged assets will indicate the exchange lacks commercial substance. Your clients would prefer that the exchange be deemed to have commercial substance, to allow them to record gains. Here are the facts:Client A Client B
Original cost $100,000 $150,000
Accumulated depreciation 40,000 80,000
Fair value 80,000 100,000
Cash received (paid) (20,000) 20,000

(a) Record the trade-in on Client A's books assuming the exchange has commercial substance.

(b) Record the trade-in on Client A's books assuming the exchange lacks commercial substance.

(c) Write a memo to the controller of Company A indicating and explaining the dollar impact on current and future statements of treating the exchange as having versus lacking commercial substance.

(d) Record the entry on Client B's books assuming the exchange has commercial substance.

(e) Record the entry on Client B's books assuming the exchange lacks commercial substance.

(f) Write a memo to the controller of Company B indicating and explaining the dollar impact on current and future statements of treating the exchange as having versus lacking commercial substance.

Reference no: EM131118217

Questions Cloud

Does your analysis in part a support this statement : Indicate whether each of the following independent transactions increases, decreases, or has no effect on each of the four debt ratios. The text states that analyst need not compute all four debt ratios each year because the debt ratios are highly co..
What stakeholder interests are in conflict : (a) What stakeholder interests are in conflict?(b) What ethical issues does Carter face?(c) How should these costs be allocated?
Discuss each of the points raised by the owner : Charging the $7,500 to expense immediately will reduce federal income taxes. Discuss each of the points raised by the owner of the business.(AICPA adapted)
What is the likely direction of change in cash flow : What is the likely direction of change in cash flow from operations? How would your answer be different if sales and net income were increasing?
Write a memo to the controller of company a indicating : Write a memo to the controller of Company B indicating and explaining the dollar impact on current and future statements of treating the exchange as having versus lacking commercial substance.
What is the likely explanation for these results : A firm has experienced a decrease in its current ratio but an increase in its quick ratio during the last three years. What is the likely explanation for these results?
What is the likely explanation for these results : A firm has experienced an increasing current ratio but a decreasing operating cash flow to current liabilities ratio during the last three years. What is the likely explanation for these results?
Capitalization of interest vania magazine company : Capitalization of Interest Vania Magazine Company started construction of a warehouse building for its own use at an estimated cost of $5,000,000 on January 1, 2009, and completed the building on December 31, 2009.
How do you interpret the net borrowing rate for this firm : The result will be net financial obligations that are negative. Assume that operating ROA is positive and large. How will this affect the decomposition of ROCE = Operating ROA + (Leverage × Spread)? How do you interpret the net borrowing rate for thi..

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd