The production manager of Sarasota Corporation wants to acquire a different brand of machine by exchanging...
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The production manager of Sarasota Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Sarasota a similar machine plus $23,690 in exchange for Sarasota's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,240 cash in addition to Sarasota's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 3. 4. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Sarasota would have to pay $95,790 and also trade in its old machine. Sarasota's equipment has a cost of $164,800, a net book value of $113,300, and a fair value of $94,760. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $123,600 $151,410 $164,800 $133,900 Accumulated depreciation-machinery 46,350 73,130 77,250 -0- Fair value 71,070 94,760 103,000 190,550 There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 2: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Bateman Company Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery Transaction 3: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Cash Shripad Company Account Titles and Explanation Debit Credit Machinery Cash Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery The production manager of Sarasota Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Sarasota a similar machine plus $23,690 in exchange for Sarasota's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,240 cash in addition to Sarasota's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 3. 4. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Sarasota would have to pay $95,790 and also trade in its old machine. Sarasota's equipment has a cost of $164,800, a net book value of $113,300, and a fair value of $94,760. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $123,600 $151,410 $164,800 $133,900 Accumulated depreciation-machinery 46,350 73,130 77,250 -0- Fair value 71,070 94,760 103,000 190,550 There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 2: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Bateman Company Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery Transaction 3: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Cash Shripad Company Account Titles and Explanation Debit Credit Machinery Cash Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery The production manager of Sarasota Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Sarasota a similar machine plus $23,690 in exchange for Sarasota's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,240 cash in addition to Sarasota's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 3. 4. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Sarasota would have to pay $95,790 and also trade in its old machine. Sarasota's equipment has a cost of $164,800, a net book value of $113,300, and a fair value of $94,760. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $123,600 $151,410 $164,800 $133,900 Accumulated depreciation-machinery 46,350 73,130 77,250 -0- Fair value 71,070 94,760 103,000 190,550 There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 2: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Bateman Company Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery Transaction 3: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Cash Shripad Company Account Titles and Explanation Debit Credit Machinery Cash Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery The production manager of Sarasota Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Sarasota a similar machine plus $23,690 in exchange for Sarasota's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,240 cash in addition to Sarasota's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 3. 4. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Sarasota would have to pay $95,790 and also trade in its old machine. Sarasota's equipment has a cost of $164,800, a net book value of $113,300, and a fair value of $94,760. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $123,600 $151,410 $164,800 $133,900 Accumulated depreciation-machinery 46,350 73,130 77,250 -0- Fair value 71,070 94,760 103,000 190,550 There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 2: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Bateman Company Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery Transaction 3: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Cash Shripad Company Account Titles and Explanation Debit Credit Machinery Cash Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery The production manager of Sarasota Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Sarasota a similar machine plus $23,690 in exchange for Sarasota's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,240 cash in addition to Sarasota's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 3. 4. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Sarasota would have to pay $95,790 and also trade in its old machine. Sarasota's equipment has a cost of $164,800, a net book value of $113,300, and a fair value of $94,760. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $123,600 $151,410 $164,800 $133,900 Accumulated depreciation-machinery 46,350 73,130 77,250 -0- Fair value 71,070 94,760 103,000 190,550 There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 2: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Bateman Company Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery Transaction 3: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Cash Shripad Company Account Titles and Explanation Debit Credit Machinery Cash Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery The production manager of Sarasota Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Sarasota a similar machine plus $23,690 in exchange for Sarasota's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,240 cash in addition to Sarasota's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 3. 4. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Sarasota would have to pay $95,790 and also trade in its old machine. Sarasota's equipment has a cost of $164,800, a net book value of $113,300, and a fair value of $94,760. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $123,600 $151,410 $164,800 $133,900 Accumulated depreciation-machinery 46,350 73,130 77,250 -0- Fair value 71,070 94,760 103,000 190,550 There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Transaction 2: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Bateman Company Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery Transaction 3: Sarasota Corporation Account Titles and Explanation Debit Credit Machinery Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery Cash Shripad Company Account Titles and Explanation Debit Credit Machinery Cash Accumulated Depreciation - Machinery Machinery Gain on Disposal of Machinery
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Transaction General Journal Debit Credit 2 1 Monty Corporation Cash 23690 Accumulated Depreciation 5... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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