Assume that Coaltown Corporation has a machine that cost $52,000, has a book value of $35,000, and
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(a) Coaltown exchanged the machine for a truck with a list price of $43,000.
(b) Coaltown exchanged the machine with another manufacturing company for a similar machine with a list price of $41,000.
(c) Coaltown exchanged the machine for a newer model machine from another manufacturing company. The new machine had a list price of $62,000, and Coaltown paid a “large” amount of cash of $15,000.
(d) Coaltown exchanged the machine plus a “small” amount of cash of $3,000 for a similar machine from Newton Inc., a manufacturing company. The newly acquired machine is carried on Newton’s books at its cost of $55,000 with accumulated depreciation of $42,000; its fair market value is $43,000. In addition to determining the value, give the journal entries for both companies to record the exchange.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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