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masha68 [24]
3 years ago
9

Skysong Company purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in ca

sh. The following data relate to the purchase. List price of new melter $17,380 Cash paid 11,000 Cost of old melter (5-year life, $770 salvage value) 12,320 Accumulated Depreciation-old melter (straight-line) 6,930 Secondhand fair value of old melter 5,720 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Skysong’s fiscal year ends on December 31, and depreciation has been recorded through December 31, 2019. (C
Business
1 answer:
adell [148]3 years ago
5 0

Answer:

(a) has commercial substance

J1

Electric wax melter 5,720 (debit)

Accumulated depreciation :old gas model  6,930 (debit)

Old gas model : cost 12,320 (credit)

Profit on exchange of old gas model 320 (credit)

J2

Electric wax melter 11,000 (debit)

Cash 11,000 (debit)

(b) lacks commercial substance

J1

Electric wax melter 5,390 (debit)

Accumulated depreciation :old gas model  6,930 (debit)

Old gas model : cost 12,320 (credit)

J2

Electric wax melter 11,000 (debit)

Cash 11,000 (debit)

Explanation:

In terms of IAS 16, if an exchange of non-monetary item has commercial substance the Asset Acquired is measured at the Fair Value of Asset Given up or Fair Value of Asset Acquired.

However if an exchange of non-monetary item lacks commercial substance the Asset Acquired is measured at Carrying Amount of Asset Given up and there would no be any gain or loss on the exhange of asset given up.

(a) has commercial substance

J1

Electric wax melter 5,720 (debit)

Accumulated depreciation :old gas model  6,930 (debit)

Old gas model : cost 12,320 (credit)

Profit on exchange of old gas model 320 (credit)

J2

Electric wax melter 11,000 (debit)

Cash 11,000 (debit)

(b) lacks commercial substance

J1

Electric wax melter 5,390 (debit)

Accumulated depreciation :old gas model  6,930 (debit)

Old gas model : cost 12,320 (credit)

J2

Electric wax melter 11,000 (debit)

Cash 11,000 (debit)

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Kraft has adapted its popular Oreo cookie to the unique tastes of consumers all around the world, whether it's mango-and-orange
zvonat [6]

Answer:

Product adaptation

Explanation:

Product adaptation is when an existing product is changed or modified to suit customers need in a foreign market . The aim is to satisfy customers want all around the world where the products are exported to.

There are various reasons why products may be adapted, one of which is changing the taste of a product to meet the desire of customers who are based in other countries or around the world. It may also involve either changing the brand, colour etc, just to meet customers demand all around the world.

Other reason why a product may be adapted is to comply with local laws where the products are exported to.

7 0
2 years ago
Molly sells bracelets to Jean's Place, a boutique store. Molly is scheduled to deliver 100 bracelets on July 1. On June 15, Jean
BabaBlast [244]

Answer: False

Explanation:

The contract is such that Molly agreed to bring bracelets if Jean would pay for said bracelets.

The terms of the contract therefore are that Jean would pay and Molly would deliver. Jean then calls Molly and says that they will be unable to pay which means that they are not going to be able to hold up their responsibilities in the contract.

Molly has the right to then cancel the contract because the other party will not be able to perform their obligations and face no repercussion for it.

6 0
3 years ago
Paquette purchased a building and land and immediately tore down the building how should they record the expense?
hammer [34]

Paquette purchased

federalism

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7 0
2 years ago
How much must be deposited today in an account earning 6% annually to accumulate a 20% down payment to use in purchasing a car o
goblinko [34]
Hi there
The price of the car after a year would be
20,000×(1+0.04)
=20,800 because of inflation

The amount of down payment is
20,800×0.2
=4,160

So you need to deposit
P=4,160÷(1+0.06)
p=3,924.5 round your answer to get
P=3925

Hope it helps
8 0
3 years ago
Midwest Corporation has provided the following data concerning manufacturing overhead for 2020: Estimated manufacturing overhead
Firlakuza [10]

Answer:

$18,000

Explanation:

The computation of the amount of manufacturing overhead is shown below:

But before that first determine the overhead rate which is

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Now the amount of manufacturing overhead applied for Job A-101 is

= $1,200 × $15

= $18,000

Hence, the amount of applied manufacturing overhead is $18,000

5 0
3 years ago
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