Riverbed Company purchased an electric press on June 30, 2025, by trading in its old gas model and paying the balance in cash. following data relate to the purchase: List price of new press Cash paid Cost of old press (10-year life, $900 residual value) Accumulated depreciation-old press (straight-line) Second-hand market value of old press $24,400 11,600 35,300 26,700 7,200 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lac commercial substance. Riverbed's fiscal year ends on December 31, and depreciation has been recorded through December 31, 202 (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" fom the account titles and enter O for the amounts List all debit entries before credit entries)
Riverbed Company purchased an electric press on June 30, 2025, by trading in its old gas model and paying the balance in cash. following data relate to the purchase: List price of new press Cash paid Cost of old press (10-year life, $900 residual value) Accumulated depreciation-old press (straight-line) Second-hand market value of old press $24,400 11,600 35,300 26,700 7,200 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lac commercial substance. Riverbed's fiscal year ends on December 31, and depreciation has been recorded through December 31, 202 (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" fom the account titles and enter O for the amounts List all debit entries before credit entries)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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