A machine that cost $9,060 with $3,980 of accumulated depreciation was traded in for a similar machine

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A machine that cost $9,060 with $3,980 of accumulated depreciation was traded in for a similar machine having a $5,820 cash price. An $840 trade-in was offered by the seller.

a. Calculate the book value of the old machine.

b. Calculate the loss on the exchange.

c. Prepare the journal entry for the exchange.

d. Calculate the cost basis of the new equipment if the income tax method is used and prepare a journal entry.

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College Accounting A Practical Approach

ISBN: 978-0133133233

12th edition

Authors: Jeffrey Slater

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Question Posted: Apr 24, 2014 10:32 AM

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A machine that cost $9,060 with $3,980 of accumulated depreciation was traded in for a similar machine

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College Accounting A Practical Approach

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