On July 1, Twin Pines Co., a water distiller, acquired new bottling equipment with a list price (fair market value) of $220,000. Twin Pines received a trade-in allowance (fair market value) of $45,000 on the old equipment of a similar type and paid cash of $175,000. The following information about the old equipment is obtained from the account in the equipment ledger: cost, $180,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $120,000; annual depreciation, $12,000.Assuming that the exchange has commercial substance, journalize the entries to record (a) the current depreciation of the old equipment to the date of trade-in and (b) the exchange transaction on July 1.

On July 1, Twin Pines Co., a water distiller, acquired new bottling equipment with a list price (fair market value) of $220,000. Twin Pines received a trade-in allowance (fair market value) of $45,000 on the old equipment of a similar type and paid cash of $175,000. The following information about the old equipment is obtained from the account in the equipment ledger: cost, $180,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $120,000; annual depreciation, $12,000.Assuming that the exchange has commercial substance, journalize the entries to record (a) the current depreciation of the old equipment to the date of trade-in and (b) the exchange transaction on July 1.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4PB: During the current year, Arkells Inc. made the following expenditures relating to plant machinery. ...

See similar textbooks

Similar questions

During the current year, Arkells Inc. made the following expenditures relating to plant machinery. Renovated seven machines for $250,000 to improve efficiency in production of their remaining useful life of eight years Low-cost repairs throughout the year totaled $79,000 Replaced a broken gear on a machine for $6,000 A. What amount should be expensed during the period? B. What amount should be capitalized during the period?
On October 1, Bentley Delivery Services acquired a new truck with a list price (fair market value) of $75,000. Bentley Delivery received a trade-in allowance (fair market value) of $24,000 on an old truck of similar type and paid cash of $51,000. The following information about the old truck is obtained from the account in the equipment ledger: cost, $56,000;accumulated depreciation on December 31, the end of the preceding fiscal year, $35,000; annual depreciation, $7,000. Assuming that the exchange has commercial substance, journalize the entries to record (a) the current depreciation of the old truck to the date of trade-in and (b) the transaction on October 1.
On October 1, Hot Springs Co., a water distiller, acquired new bottling equipment with a list price (fair market value) of $462,000. Hot Springs received a trade-in allowance of $96,000 on the old equipment of a similar type and paid cash of $366,000. The following information about the old equipment is obtained from the account in the equipment ledger: Cost, $336,000 accumulated depreciation on December 31, the end of the preceding fiscal year, $220,000; annual depreciation, $20,000. Assuming the exchange has commercial substance, journalize the entries to record: (a) the current depreciation of the old equipment to the date of trade-in and (b) the exchange transaction on October 1.
On January 2, Bering Company disposes of a machine costing $37,500 with accumulated depreciation of $20,201. Prepare the entries to record the disposal under each separate situation. 1. The machine is sold for $14,509 cash. 2. The machine is traded in for a new machine having a $54,000 cash price. A $17,857 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. 3. The machine is traded in for a new machine having a $54,000 cash price. A $13,393 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 The machine is sold for $14,509 cash. View transaction list No Date View journal entry worksheet General Journal Debit Credit X
On January 2, Bering Company disposes of a machine costing $57,600 with accumulated depreciation of $31,029. Prepare the entries to record the disposal under each separate situation. 1. The machine is sold for $22,285 cash. 2. The machine is traded in for a new machine having a $74,100 cash price. A $27,428 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. 3. The machine is traded in for a new machine having a $74,100 cash price. A $20,571 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 The machine is sold for $22,285 cash. View transaction list Journal entry worksheet Record the sale of the machine for $22,285 cash. Required 1 Required 2 Required 3 The machine is sold for $22,285 cash. View transaction list Journal entry worksheet 1 Record the sale of…
On January 2, Bering Co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625. Prepare the entries to record the disposal under each separate situation. 1. The machine is sold for $18,250 cash. 2. The machine is traded in for a new machine having a $60,200 cash price. A $25,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. 3. The machine is traded in for a new machine having a $60,200 cash price. A $15,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
Morey, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except Land. Morey completed the following transactions: Jan 4 Traded in equipment with accumlated depreciation of $64,000 (cost of $134,000) for similar new equipment with a cash cost of $175,000. Recieved a trade-in allowance of $72,000 on the old equipment and paid $103,000 in cash. Jan 29 Sold a building that had a cost of $650,000 and had accumulated depreciationof $140,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $220,000. Morey received $125,000 cash and a $379,625 note receivable. Oct 30 Purchased land and a building for a single price of $360,000 cash. An independent appraisal valued the land at $160,800 and the building at $241,200. Dec 31 Recorded depreciation as follows: Equipment has an expected…
On January 2, Bering Company disposes of a machine costing $53,000 with accumulated depreciation of $28,551. Prepare the entries co record the disposal under each separate situation. 1. The machine is sold for $20,505 cash. 2. The machine is traded in for a new machine having a $69,500 cash price, A $25,237 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance 3. The machine is traded in for a new machine having a $69,500 cash price. A $18,928 trade in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 The machine is sold for $20,505 cash. View transaction list Journal entry worksheet
On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $209,525 and has accumulated depreciation of $188,572.50. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal? a.Accumulated Depreciation, debit, $209,525 b.Gain on Disposal of Asset, credit, $20,952.50 c.Loss on Disposal of Asset, debit, $188,572.50 d.Equipment, credit, $209,525
Allyn Company purchased equipment costing $55,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 5 years. Double-declining-depreciation is used, and all depreciation has been recorded as of December 31, Year 2. If the equipment is sold on December 31, Year 2 for $15,000, the journal entry to record the sale is: A.Debit Cash, $15,000; Debit Accumulated Depreciation, $22,000; Debit Loss on Sale, $18,000; Credit Equipment, $55,000. B. Debit Cash, $15,000; Debit Accumulated Depreciation, $13,200; Debit Loss on Sale, $26,800; Credit Equipment, $55,000. C. Debit Cash, $15,000; Debit Accumulated Depreciation, $35,200; Debit Loss on Sale, $4,800; Credit Equipment, $55,000. D. Debit Cash, $15,000; Debit Accumulated Depreciation, $40,000; Credit Equipment, $55,000. E. Debit Cash, $15,000; Debit Loss on Sale, $40,000; Credit Equipment, $55,000.
On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $206,400 and has accumulated depreciation of $185,760. Depreciation has been recorded up to the end of the year. Which of the following will be included in the entry to record the disposal? a.Equipment, credit, $206,400 b.Gain on Disposal of Asset, credit, $20,640 c.Accumulated Depreciation, debit, $206,400 d.Loss on Disposal of Asset, debit, $185,760
On January 2, 2021, Athol Company bought a machine for use in operations. The machine has an estimated useful life of eight years and an estimated residual value of $1,600. The company provided the following information: a. Invoice price of the machine, $71,600. b. Freight paid by the vendor per sales agreement, $900. c. Installation costs, $2,200 cash. d. Cost of cleaning up the supplies, boxes, and other garbage that remained after the installation of the machine, $140 cash. e. Payment of the machine's price was made as follows: January 2: • Issued 1,150 common shares of Athol Company at $4 per share. • Signed a $39,000 note payable due April 16, 2018, plus 8 percent interest. • Balance of the invoice price to be paid in cash. The invoice allows for a 2 percent cash discount if the cash payment is made by January 11. January 15: Paid the balance of the invoice price in cash. April 16: Paid the note payable and interest in cash. f. On June 30, 2023, the company completed the…