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31, 2004. What amount should Carr use to determine the gain or loss on
this involuntary conversion?
Question 14
On July 1, 2005, Glen Corp. leased a new machine from Ryan Corp. The
lease contains the following information: No bargain purchase option is
provided, and the machine reverts to Ryan when the lease expires. What
amount should Glen record as a capitalized leased asset at inception of
the lease?
Question 15
Scott Co. exchanged nonmonetary assets with Dale Co. No cash was
exchanged. There is commercial substance to the exchange. The
carrying amount of the asset surrendered by Scott exceeded both the fair
value of the asset received and Dale's carrying amount of that asset.
Scott should recognize the difference between the carrying amount of
the asset it surrendered and
Question 16
Lease A does not contain a purchase option, but the lease term is equal
to 90 percent of the estimated economic life of the leased property.
Lease B does not transfer ownership of the property to the lessee by the
end of the lease term, but the lease term is equal to 75 percent of the
estimated economic life of the leased property. How should the lessee
classify these leases?
Question 17
On December 31, 2005, Bit Co. had capitalized costs for a new
computer software product with an economic life of five years. Sales for
2006 were 30 percent of expected total sales of the software. At