Answered: Record the gain or loss for Midwest…

Business

Accounting

Record the gain or loss for Midwest Chicken on the exchange of the equipment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

China Inn and Midwest Chicken exchanged assets. Midwest Chicken received restaurant equipment and gave delivery equipment.
The fair value and book value of the delivery equipment given were $30,400 and $32,300 (original cost of $36,600 less accumulated
depreciation of $4,300), respectively. To equalize market values of the exchanged assets, Midwest Chicken received $8,900 in cash
from China Inn.
Record the gain or loss for Midwest Chicken on the exchange of the equipment. (If no entry is required for a particular
transaction/event, select "No Journal Entry Required" In the first account fleld.)
View transaction list
Journal entry worksheet
1
Record the gain or loss for Midwest Chicken on the exchange of the
equipment.
Note: Enter debits before credits.
Transaction
1
Record entry
General Journal
Clear entry
Debit
Credit
View general journal

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China Inn and Midwest Chicken exchanged assets. China Inn received delivery equipment and gave restaurant equipment. The fair value and book value of the restaurant equipment were $22,500 and $15,000 (original cost of $40,000 less accumulated depreciation of $25,000), respectively. To equalize market values of the exchanged assets, China Inn paid $7,600 in cash to Midwest Chicken. Record the gain or loss for China Inn on the exchange of the equipment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet No 1 Transaction 1 Loss Cash General Journal Equipment (Restaurant) Debit 7,600 Credit 40,000
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