Purchase Solution

Nonmonetary Exchanges with Boot

Not what you're looking for?

Ask Custom Question

8. (Nonmonetary Exchanges with Boot) Susquehanna Corporation wishes to exchange
a machine used in its operations. Susquehanna has received the following offers from
other companies in the industry.
1. Choctaw Company offered to exchange a similar machine plus $23,000.
2. Powhatan Company offered to exchange a similar machine.
3. Shawnee Company offered to exchange a similar machine, but wanted $8,000 in
addition to Susquehanna's machine.
In addition, Susquehanna contacted Seminole Corporation, a dealer in machines. To
obtain a new machine, Susquehanna must pay $93,000 in addition to trading in its old
machine.
Susquehanna Choctaw Powhatan Shawnee Seminole
Machine cost $160,000 $120,000 $147,000 $160,000 $130,000
Accumulated 50,000 45,000 71,000 75,000 -0-
depreciation
Fair value 92,000 69,000 92,000 100,000 185,000
Instructions
For each of the four independent situations, prepare the journal entries to record the
exchange on the books of each company. (Round to nearest dollar.)

Purchase this Solution
Solution Summary

The solution explains Nonmonetary Exchanges with Boot using the example of Susquehanna Corporation

Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

View More Free Quizzes
Related BrainMass Solutions

  • What is the role of 'boot' in the exchange of assets?

    In exchanges, there are two types of boot: cash boot and mortgage boot. Cash boot is cash or anything else of value received. Mortgage boot is any liabilities assumed or taken subject to in the exchange.

  • Accounting For Nonmonetary Exchanges

    499928 Accounting for Nonmonetary Exchanges Which of the following statements correctly describes the proper accounting for non-monetary exchanges that are deemed to have commercial substance?

  • Scott MacDonald Transfers Land with an Adjusted Basis.

    Additional resources for Section 351 Exchanges are also provided for further student expansion.

  • Nonmonetary Exchanges

    116375 Accounting problem E10-18 (Nonmonetary Exchanges) Cannondlae Company purchased an electric wax melter on April 30,2008, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase .

  • Straight line depreciation and gain or loss on disposition

    Gain = Fair value - book value Gain = 45,000-40,500 = $4,500 GAAP recognizes gains in proportion to the boot received in exchanges lacking commercial substance, provided that boot received is less than 25% of total consideration received.

  • Realized, Recognized and Deferred Gain or Loss

    (A) Corporation exchanges several pieces of office furniture ($2,900 value and basis of $1,250) for 10 filing cabinets from (B) Corporation (filing cabinets value of $2,500 with a basis of $3,000).

  • Income tax liability: replacement property in a sale of land

    If the seller does receive cash for part of the transfer (called boot), it is taxable to the extent of the cash received.

  • Asset cost and like-kind exchange problems

    352137 Asset Cost and Like-Kind Exchange Problems Topic on attached problems: acquisitions costs lump-sum acquisitions nonmonetary exchanges like kind exchanges valuation of PPE for Cadburry Problem 1 8 18 10-14.

  • Inventory methods and adjusting entries

    433627 Inventory methods and adjusting entries P10-8 (Nonmonetary Exchanges) Susquehanna Corporation wishes to exchange a machine used in its operations.

View More Related Solutions