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ycow [4]
3 years ago
7

Hunter Sailing Company exchanged an old sailboat for a new one. The old sailboat had a cost of $250,000 and accumulated deprecia

tion of $150,000. The new sailboat had an invoice price of $263,000. Hunter received a trade in allowance of $116,000 on the old sailboat, which meant the company paid $147,000 in addition to the old sailboat to acquire the new sailboat. If this transaction lacks commercial substance, what amount of gain or loss should be recorded on this exchange
Business
1 answer:
Alisiya [41]3 years ago
5 0

Answer:

The gain is $17,000

Explanation:

Solution

Recall that:

Hunter sailing Company replaced an oil sailboat for a new one

The cost of the old sailboat =$250,000

The accumulated depreciation = $150,000

The invoice price of new sailboat = $263,000

Trade in allowance received = $116,000

The company old sailboat = $147,000

Now,

Market value of new sailboat = $263,000

Book value of old sailboat= ($250,000 - $150,000) = $100,000

The cash = $147,000

 100,000 + 146,000 = $246,000

The gain = $263,000- $246,000 = $17,000

As this transaction lacks commercial substance, the $17,000 gain should not be recognized.

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2 years ago
Which term best completes the outline?
Strike441 [17]

Answer:

C. Market.

Explanation:

An economy is a function of how money, means of production and resources (raw materials) are carefully used to facilitate the demands and supply of goods and services to meet the unending needs or requirements of the consumers.

Hence, a region's or country's economy is largely dependent on how resources are being allocated and utilized, how many goods and services are to be produced, what should be produced, for whom they are to be produced for and how much money are to be spent by the consumers to acquire these goods and services.

Basically, there are four (4) main types of economy and these are;

I. Mixed economy.

II. Command economy.

III. Traditional economy.

IV. Free market economy.

A free-enterprise system also referred to as capitalism or free market can be defined as a type of economy in which prices, products and services are being determined by the market rather than the government. Thus, a free-enterprise system is devoid (free) of government regulations, interference or control because the market (enterprises) are the ones who are saddled with the responsibility of determining the market forces.

Simply stated, a free-enterprise system is a type of economy that is completely driven by demand and supply of goods and services.

The four (4) main elements or characteristics of a free enterprise system includes the following;

a. Profit: businesses are all out to generate revenue and profit through the sales of finished goods.

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In conclusion, a market is characterized by the following economy;

I. Economic freedom

II. Competition between businesses

III. Decisions motivated by profit

5 0
3 years ago
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Answer:

C

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3 years ago
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Hoochie [10]

Answer:

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