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Daniel [21]
3 years ago
6

Marker Corp. exchanged an old truck for a piece of equipment and cash on January 1st 2019. The truck was purchased at a cost of

$24,000 and accumulated depreciation at the time of the exchange is $17,000. As compensation for the truck, Marker received a piece of equipment with a fair value of $8,000 and $500 cash. How much gain would be recognized assuming this transaction DOES have commercial substance? Do not use dollar signs or decimals when inputting your answer.
Business
1 answer:
LiRa [457]3 years ago
3 0

Answer:

There is a 1,500 gain

Explanation:

we have commercial subtance so we can recognize gain/loss

these will be the numebrs of the transaction:

truck

purchase             24,000

acc depreciation 17, 000

book value            7, 000

equipment 8,000

cash               500

total            8,500

received - given up = gain/loss

8,500      -    7,000  = 1,500 gain

the journal entry would be

Equipment      8,000 debit

cash                    500 debit

acc dep truck 17,000 debit

           Truck              24,000 credit

          gain on disposal 1,500 credit

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3 years ago
When preparing the statement of cash flows using the indirect​ method, which statement is​ INCORRECT? A. Losses on the sale of l
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Answer:

The correct answer is Option A.

Explanation:

A. Losses on the sale of longminusterm assets are subtracted from net income - This is incorrect because on losses on sale of an asset are usually added to the net income to avoid double-counting of income. Under the investing section of the cash flows, the proceed received on disposal is recorded there as inflow, if the losses realized on the disposal are subtracted, there would be a double-counting because the losses had already reduced the net income before.

B. Increases in current liabilities are added to net income - This is an inflow of cash, so it is usually added back.

C. Depreciation expense is added to net income - The explanation under Option A above applies but only that depreciation is a non-cash item, which already reduced the net income and it has to be added back to reinstate the net income.

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3 0
3 years ago
he appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow 1 $700 2 700 3 0 4 1
rewona [7]

Answer:

Thus, the present value is $2045.52.

Explanation:

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=\frac{700}{(1 + \frac{0.08}{4} )^{1 \times 4} } + \frac{700}{(1 + \frac{0.08}{4} )^{2 \times 4} } + \frac{0}{(1 + \frac{0.08}{4} )^{3 \times 4} } +\frac{1100}{(1 + \frac{0.08}{4} )^{4 \times 4} } \\ \\= \frac{700}{1.0824}+\frac{700}{1.1716} +0+\frac{1100}{1.3727} \\= 2045.52

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3 years ago
The type of vertical marketing system that achieves coordination at successive stages of production and distribution by the size
satela [25.4K]

Answer:

The correct options are the third and the last:

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4 0
3 years ago
Case company allocates $5 overhead to each unit produced. the company uses a plantwide overhead rate with machine hours as the a
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Let Department 2 Machine hours Be x, and using the equation below. 

<span>Find  ATQ : </span>

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Therefore, there are 63,000 machine hours that the company expects in Department 2.

<span> </span>

6 0
3 years ago
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