Question: Part (C) (1)A computer server system, which had cost $210,000 and had accumulated depreciation of $147,000, was traded for a new system with a fair
Part (C)
(1)A computer server system, which had cost $210,000 and had accumulated depreciation of $147,000, was traded for a new system with a fair market value of $235,000. The old system and cash of $180,000 were given for the new system. Prepare the journal entry for the exchange of these similar assets.
(2)Prepare journal entries for the following for Bartz, Inc.
May 11 Replaced the engine in a Van #1, paying cash of $5,400.
May 18 Paid cash for a tune-up of the engine in Van #2 of $570.
May 29 Paid cash to add a lift to Van #2 of $3,700
My answer:
1.
Date-----------------------------Particular-------------------------------Debit-------------------------Credit
--------------------------------------New Computer System--------------235,000.00------------------------
-------------------------------------Accumulated depreciation-----------147,000.00------------------------
-------------------------------------Loss of sale of asset------------------8,000.00--------------------------
-------------------------------------Computer system (old)---------------------------------------210,000.00
------------------------------------Cash---------------------------------------------------------------180,000.00
2.
Date--------------------------Particulars---------------------------------Debit-----------------------Credit
-----------------------------------Van Engine--------------------------------5,400.00--------------------------
May 11---------------------------Cash-----------------------------------------------------------------5,400.00
-----------------------------------To record engine replacement on van-------------------------------------
May 18----------------------------Tune Up Expense--------------------------------570.00-------------------
-------------------------------------Cash-------------------------------------------------------------------570.00
-----------------------------------To record tune up expense---------------------------------------------------
May 29----------------------------Van Lift--------------------------------------------3,700.00------------------
-------------------------------------Cash------------------------------------------------------------------3,700.00
-----------------------------------To record addition of lift to van--------------------------------------------
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