Question Details

Show the calculation of the amount of the gain or loss 



Pr. 1—Nonmonetary exchange.
Rogers Co. had a sheet metal cutter that cost $96,000 on January 5, 2006. This old cutter had an estimated life of ten years and a salvage value of $16,000. On April 3, 2011, the old cutter is exchanged for a new cutter with a market value of $48,000. The exchange lacked commercial substance. Rogers also received $12,000 cash. Assume that the last fiscal period ended on December 31, 2010, and that straight-line depreciation is used.

Instructions
(a)	Show the calculation of the amount of the gain or loss to be recognized by Rogers Co.
(b)	Prepare all entries that are necessary on April 3, 2011. Show a check of the amount recorded for the new cutter.


Pr. 2—Nonmonetary exchange.
Layne Co. has a machine that cost $255,000 on March 20, 2007. This old machine had an estimated life of ten years and a salvage value of $15,000. On December 23, 2011, the old machine is exchanged for a new machine with a market value of $162,000. The exchange lacked commercial substance. Layne also received $18,000 cash. Assume that the last fiscal period ended on December 31, 2010, and that straight-line depreciation is used.

Instructions
(a) Show the calculation of the amount of gain or loss to be recognized by Layne Co. from the exchange.  (Round to the nearest dollar.)
(b) Prepare all entries that are necessary on December 23, 2011. Show a check of the amount recorded for the new machine.





Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help