Wildcat Baseball Company Had a Player Contract with Carter That

question 26

Short Answer

Wildcat Baseball Company had a player contract with Carter that was recorded in its accounting records at $5,800,000.Aggie Baseball Company had a player contract with Jeter that was recorded in its accounting records at $5,600,000.Wildcat traded Carter to Aggie for Jeter by exchanging each player's contract.The fair value of each contract was $6,000,000.What amount should be shown in the accounting records after the exchange of player contracts? $\begin{array}{lll}&\text { Wildcat } & \text { Aggie }\\\text { a. } & \$ 5,600,000 & \$ 5,600,000 \\\text { b. } & \$ 5,600,000 & \$ 5,800,000 \\\text { c. } & \$ 5,800,000 & \$ 5,600,000 \\\text { d. } & \$ 6,000,000 & \$ 6,000,000\end{array}$

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Definitions:

Earnings Per Share

The portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.

Corporate Income Statement

is a financial document that outlines a corporation’s revenues, expenses, and profits or losses over a specific period.

Income From Continuing Operations

The earnings generated from a company's ongoing core business operations, excluding extraordinary items.

Cumulative Effect

The aggregate impact of an accounting change or policy adjustment over the period before the adjustment is implemented, often recognized immediately in financial statements.