Colt Football Co. had a player contract with Watts that is recorded in its books
ID: 2366198 • Letter: C
Question
Colt Football Co. had a player contract with Watts that is recorded in its books at $3,600,000 on July 1, 2010. Day Football Co. had a player contract with Kurtz that is recorded in its books at $4,500,000 on July 1, 2010. On this date, Colt traded Watts to Day for Kurtz and paid a cash difference of $450,000. The fair value of the Kurtz contract was $5,400,000 on the exchange date. The exchange had no commercial substance. After the exchange, the Kurtz contract should be recorded in Colt's books at a. $4,050,000. b. $4,500,000. c. $4,950,000. d. $5,400,000. Use the following information for questions 2 through 4. On March 1, 2010, Newton Company purchased land for an office site by paying $540,000 cash. Newton began construction on the office building on March 1. The following expenditures were incurred for construction: Date Expenditures March 1, 2010 $ 360,000 April 1, 2010 504,000 May 1, 2010 900,000 June 1, 2010 1,440,000 The office was completed and ready for occupancy on July 1. To help pay for construction, $720,000 was borrowed on March 1, 2010 on a 9%, 3-year note payable. Other than the construction note, the only debt outstanding during 2010 was a $300,000, 12%, 6-year note payable dated January 1, 2010.Explanation / Answer
TRUE Colt Football Co. had a player contract with Watts that is recorded in its books at $3,600,000 on July 1, 2010. Day Football Co. had a player contract with .