During the current year Garrison Construction ttaded in

two relatively #2119

During the current year, Garrison Construction ttaded in two relatively new small cranes (cranes
no. 6RTand S79) for a larger crane that Garrison expects will be more useful for the particular
contracts that the company has to fulfill over the next couple of years. The new crane is
acquired from Pisani Manufacturing, which has agreed to take the smaller equipment as trade-
ins and also pay $17,500 cash to Garrison. The new crane cost Pisani $165,000 to manufacture
and is classified as inventory. The following information is available:Instructions(a) Assume that
this exchange has commercial substance. Prepare the journal entries on the books of (1)
Garrison Construction and (2) Pisani Manufacturing. Pisani uses a perpetual inventory
system.(b) Assume that this exchange lacks commercial substance. Prepare the journal entries
on the books of (1) Garrison Construction and (2) Pisani Manufacturing. Pisani uses a perpetual
inventory system.(c) Assume that you have been asked to recommend whether it is more
appropriate for the transaction to have commercial substance or not to have commercial
substance. Develop arguments that you could present to the controllers of both Garrison
Construction and Pisani Manufacturing to justify both alternatives. Which arguments are more
persuasive?View Solution:
During the current year Garrison Construction ttaded in two relatively

ANSWER
http://paperinstant.com/downloads/during-the-current-year-garrison-construction-ttaded-in-two-
relatively/

1/1
Powered by TCPDF (www.tcpdf.org)