Maurice Tutor

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Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 402 Weeks Ago, 1 Day Ago
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Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 04 Aug 2017 My Price 12.00

Pizza Company

Exercise 1:

Pizza Company trades its used delivery cars for a new models at Hudson Toyota. The used cars have a book value of $60,000 (original cost $140,000 less $80,000 accumulated depreciation). The new cars have MSRP of $80,000. The fair value of the old cars based on estimation by third party is $50,000. After some negotiations between the Pizza Company and Hudson Toyota, the new cards would receive $10,000 discount and the trade in value of the old trucks in the amount of $55,000. The remaining portions is to be paid in cash.

Prepare the journal entries assuming a) commercial substance and b) no commercial substance.

Exercise 2:

On July 1, 2013, Pizza Company decided to trade-in their used equipment (ovens, refrigerators, ect.) for new models at Sears. The old equipment was initially purchased for $120,000 in January 2010. At that time, the useful life was determined to be 5 years. (The company uses the straight line to determine depreciation expense)

The new equipment has a listing price after all applicable discounts of $50,000. If company is to sell its old equipment to third party, they would realize $45,000 on average.

  1. Prepare the journal entries assuming no commercial substance.

  2. This time, there is no commercial substance and the company paid $10,000. Prepare the journal

    entry for the exchange!

  3. This time, there is no commercial substance and the company received $10,000. Prepare the

    journal entry for the exchange!

Answers

Maurice Tutor
(5)
Status NEW Posted 04 Aug 2017 11:08 PM My Price 12.00

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