Question

View Policies Current Attempt in Progress Grouper is a cologne retailer. During 2020, Grouper had the following non-monetary transactions. Scenario 1: Grouper exchanged 4,700 of its common shares (FMV of $11 each) for equipment with a FMV of $56,400. Scenario 2: Grouper traded machinery with a cost of $15,500 and accumulated depreciation of $6,200 for an inventory management equipment owned by Francis Inc. which is expected to help increase the speed with which Grouper fills its orders. An additional $3,100 was paid by Grouper in the exchange. The inventory management equipment has a cost of $21,300 and accumulated depreciation of $12,780 on Francis' accounting records. Fair values for the machinery and the inventory management equipment are $10,200 and $13,300 respectively. For each of the above independent scenarios, prepare the journal entry necessary to record the transaction, assuming that Grouper follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) No. Account Titles and Explanation Debit Credit Scenario 1 Scenario 2

Answer 1

No.	Account title and Explanation	Debit	Credit
Scenario 1	Equipment (use market value)	$56,400
	Common stock		$56,400
	[Exchanged common shares for equipment]
Scenario 2	Equipment	$13,300
	Accumulated depreciation-Machinery	$6,200
	Machinery		$15,500
	Cash		$3,100
	Gain on disposal of machinery		$900
	[Traded machinery for an inventory management equipment]