Nonmonetary Exchange Athens Inc

question 343

Essay

Nonmonetary exchange Athens Inc.exchanged machinery with an appraised value of $1,170,000, a recorded cost of $1,800,000 and accumulated depreciation of $900,000, for machinery that Sparta Corp.owns. Sparta's machinery has an appraised value of $1,140,000, a recorded cost of $2,160,000, and accumulated depreciation of $1,188,000.Sparta also gave Athens $30,000 in the exchange. Assume depreciation has been updated to the date of exchange. Instructions
a)Prepare the entries on both companies' books assuming that the transaction has
commercial substance.
b)Prepare the entries on both companies' books assuming that the transaction lacks
commercial substance.

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Definitions:

Correct Location

The optimal or most suitable place for a particular activity, business, or facility based on strategic, economic, or logistical considerations.

Target Market

A specific group of potential customers at whom a company directs its products and marketing efforts, based on their shared characteristics.

Marketing Plan

A comprehensive document or blueprint that outlines a company's advertising and marketing efforts for the coming period.

Marketing Mix

A combination of factors that can be controlled by a company to influence consumers to purchase its products, typically identified as product, price, place, and promotion.