Answer:
The answer is c. Equipment: 87,200; Gain/(loss): (15,500).
Explanation:
Since the exchange has commercial substance,
- Fair value of the equipment is equal to: Fair value of the land - Cash consideration receipt = 89,900 - 2,700 = $87,200.
- The disposal of land in the Balance sheet following the exchange needs to account for the differences between Book value of land and Fair value of land. Since Fair value is now smaller than Book Value, a Loss has to be recognized at the amount calculated as (Fair value - Book value) = (89,900 - 105,400) = $(15,500).
Thus, the answer is c. $87,200 $(15,500).
Answer:
The correct answer to the following question is option A) inventory visualization .
Explanation:
The given above statement can easily be said as the definition of inventory and through this statement it is quite clear that the main idea is about inventory visualization and as we all know that the main purpose of the inventory is to satisfy the consumers needs and wants. The inventory can be in form of raw material , work in progress and finished goods .
<span>Fair value is defined as, a rational and unbiased estimate of the potential market price of a good, service, or asset. It takes into account such objective factors as: acquisition/production/distribution costs, replacement costs, or costs of close substitutes.
Since this is an opinion question, either answering yes or no is correct, but you have to say why.
If I understand the question correctly, and the question isn't missing any parts, I would assume it's asking if you should put value on contracts as a document and other financial instruments.
I was going to say no, but because contracts can be transferred or used as currency, I would say yes.
If you say yes I would argue that giving a fair value of the contracts would make them more legal and have more bearing in a place of business. That it would prevent the fluctuation of value on that contract based on other factors like profit/loss and whether or not you transferred, changed, etc. the contract. I would argue that to protect that contract and other financial instruments, and the holders stake in it, you should create a fair value for it.
If you say no, I would argue that the contract can already be treated as a form of currency, and because of that it should not have a fair value placed on it. I would also argue that because contracts often times state the value of that contract within itself, that it should not have a fair value. And finally, I would argue that because with time, the value of items change, you should not place a fair value on a document that can be changed and can lose or gain value with time based on the purposed information in the contract.
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Answer:
$156
Explanation:
equipment cost = $15,500 + $1,600 = $17,100
five year useful life ⇒ double declining depreciation rate = (1 / 5) x 2 = 40%
salvage value = $6,000
- depreciation year 1 = 40% x $17,100 = $6,840, book value = $10,260
- depreciation year 2 = 40% x ($17,100 - $6,840) = $4,104, book value = $6,156
- depreciation year 3 = book value - salvage value = $6,156 - $6,000 = $156
When you use the double declining balance, depreciation expenses ceases when the book value = salvage value.
