Answer:
$16.50
Explanation:
Note: The complete question is attached as picture below
We know that there is a total of 90 units of oil and 30 units is consumed in period 0.
So, in period 1, the consumption amount will be = 90-30=60 units.
So, Q1 = 192 - 8P
For 60 units, the price will be 60 = 192 - 8P
8P = 192 - 60
8P = 132
P = 132 / 8
P = 16.5
So, the price in period 1 is $16.50
Answer:
The gain that Sheridan should recognize on this exchange is $135000
Explanation:
Where Exchange Transaction lacks commercial substance, the asset that is acquired is measured at the <em>Carrying Amount or Undepreciated Cost </em> of the asset given up.
The gain will then include an <em>further consideration acquired</em> on the exchange of an asset.
<u>Entries to record the exchange are as follows :</u>
Cash $135000 (debit)
New Asset at undepreciated cost $420300 (debit)
Cost of Old asset given up $420300 (credit)
Gain on exchange $135000 (credit)
Conclusion :
The gain that Sheridan should recognize on this exchange is $135000
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