On March 1, 2018, CBS acquired a machine for 50,000 in cash. The estimated useful life was
Question:
On March 1, 2018, CBS acquired a machine for €50,000 in cash. The estimated useful life was 10 years while the anticipated salvage value was €2,000. Below are presented a set of independent situations:
1. The machine is completely destroyed by a fire on June 1, 2021. CBS is entitled of an insurance settlement of €30,000. Assume that the settlement was received during the next fiscal period.
2. On November 1, 2022, CBS sold the machine for €32,000 for cash to XZY company.
3. On July 1, 2020, CBS trades its machine for a new equipment of XZY. The exchange lacks commercial substance.
Required: For each independent situation, present the journal entries to be made to record each transaction. (18%) Additional information
a. Assume that CBS uses the straight-line depreciation method.
b. The fiscal year of CBS commences on January 1 and ends on December 31 of each year
Expert Answer:
A 1 Date Accounts Debit Credit 162021 Insurance claim receivable 3000000 1560000 4... View the full answer
