1.
Concept Introduction:
Exchanging plant assets: Many times, newer plant assets are exchanged with older ones. Accounting for the exchange of assets depends on whether the exchange transaction has commercial substance. If an exchange has commercial substance, a gain or loss resulting from such exchange would be the difference between the book value of the asset and the market value of the asset.
The entries to record the disposal of machinery sold for $18,250.
2.
Concept Introduction:
Exchanging plant assets: Many times, newer plant assets are exchanged with older ones. Accounting for the exchange of assets depends on whether the exchange transaction has commercial substance. If an exchange has commercial substance, a gain or loss resulting from such exchange would be the difference between the book value of the asset and the market value of the asset.
The entries to record disposal assuming the new machine value is $60,200 and a trade-in allowance of $25,000.
3.
Concept Introduction:
Exchanging plant assets: Many times, newer plant assets are exchanged with older ones. Accounting for the exchange of assets depends on whether the exchange transaction has commercial substance. If an exchange has commercial substance, a gain or loss resulting from such exchange would be the difference between the book value of the asset and the market value of the asset.
The entries to record disposal when the machine is traded with the new machine having a cash price $60,200 and a trade-in allowance of $15,000.
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- 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 worksheetarrow_forwardOn 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…arrow_forward7.14 Alpha sells machine B for $50,000 cash on 30 April 20X4. Machine B cost $100,000 when it was purchased and has a carrying amount of $65,000 at the date of disposal. What are the journal entries to record the disposal of machine B? DEBIT Accumulated depreciation DEBIT Loss on disposal (SPL) DEBIT Cash CREDIT Non-current assets - cost A $35,000 $15,000 $50,000 $100,000 DEBIT Accumulated depreciation DEBIT Loss on disposal (SPL) CREDIT Non-current assets - cost $65,000 $35,000 $100,000 DEBIT Accumulated depreciation DEBIT Cash CREDIT Non-current assets CREDIT Profit on disposal (SPL) $35,000 $50,000 $65,000 $20,000 DEBIT Non-current assets DEBIT Accumulated depreciation CREDIT Cash CREDIT Profit on disposal (SPL) $65,000 $35,000 $50,000 $50,000arrow_forward
- A new cash register was purchased on the 1 April 200X for R5000 cash. Which of the following amount represents tje depreciation expense for the new cash register purchased on 1 April? A.R250 B.R125 C.None of the above D.R167arrow_forwardDetermining Asset Cost When Paying with Cash and Notes Payable Ked Inc. purchases equipment, which has a cash price of $2,690. Terms are arranged for a $800 cash down payment plus payment of the remaining $1,890, plus 15% compound interest per annum, through three equal payments. The purchase occurs on January 1, and the three payments occur on each December 31 thereafter. Required • Round answer to the nearest whole dollar. • Do not use negative signs with your answers. a. Compute the amount of each annual payment. $ b. What does Ked record for the cost of equipment? $ c. What total amount of interest was paid? $ 2,690 X Xarrow_forwardPart A On 3 January 2022, Xavier Ltd exchanged a machine with Carey Ltd. with a cost of $430 000 and accumulated depreciation of $150 000 for a new similar machine with a price of $460 000. Ignore GST. Required: Prepare general journal entries including narrations to record the exchange of the machines. 1. the derecognition of the old machine, assuming a trade-in allowance of $260 000 was received for the old machine and the balance was paid with a loan from Trinity Bank Ltd, and; 2. the acquisition of the new machine.arrow_forward
- Determining Asset Cost When Paying with Cash and Notes Payable Ked Inc. purchases equipment, which has a cash price of $9,416. Terms are arranged for a $2,800 cash down payment plus payment of the remaining $6,616, plus 15% compound interest per annum, through three equal payments. The purchase occurs on January 1, and the three payments occur on each December 31 thereafter. Required • Round answer to the nearest whole dollar. • Do not use negative signs with your answers. a. Compute the amount of each annual payment. b. What does Ked record for the cost of equipment? c. What total amount of interest was paid? Check $ $ $ 0 0 0arrow_forwardAlpha sells machine B for $50,000 cash on 30 April 20X4. Machine B cost $100,000 when it was purchased and has a carrying amount of $65,000 at the date of disposal. What are the journal entries to record the disposal of machine B? A Dr Accumulated depreciation $35,000 Dr Loss on disposal (SPL) $15,000 Dr Cash $50,000 Cr Non-current assets – cost $100,000 B Dr Accumulated depreciation $65,000 Dr Loss on disposal (SPL) $35,000 Cr Non-current assets – cost $100,000 C Dr Accumulated depreciation $35,000 Dr Cash $50,000 Cr Non-current assets $65,000 Cr Profit on disposal (SPL) $20,000 D Dr Non-current assets $65,000 Dr Accumulated depreciation $35,000 Cr Cash $50,000 Cr Profit on disposal (SPL) $50,000arrow_forwardQuestion 2: Fill in the missing information in the Asset disposal account below: UpTown Enterprises is a registered vat vendor. Uptown Enterprises purchased Machinery on 1 June 2021 for R45 885 inclusive of vat. This machinery was sold on 1 December 2022 for R40 250s cash. Machinery is depreciated at 20% on cost. Vat of 15% applies to all transactions. The financial year end is 28 February 2023. (Round all answers to the nearest rand) Amounts include Vat unless stated otherwise. Dr Date 2023 Feb 28 Details A I Fol. Amount GJ B H G General Ledger Date Asset Disposal 2023 Feb 28 Feb 28 Details с E Fol. GJ CB R CR Amount D F Garrow_forward
- On the first day of the fiscal year, a new walk-in cooler with a list price of $51,300 was acquired in exchange for an old cooler and $40,600 cash. The old cooler had a cost of $44,000 and accumulated depreciation of $37,500. Assume the transaction has commercial substance. a. Determine the gain to be recorded on the exchange.$fill in the blank 4a5f8d00f04b05f_1 b. Journalize the entry to record the exchange. If an amount box does not require an entry, leave it blank. Equipment (new) fill in the blank b9746ffc1fed022_2 fill in the blank b9746ffc1fed022_3 Accumulated Depreciation fill in the blank b9746ffc1fed022_5 fill in the blank b9746ffc1fed022_6 Equipment fill in the blank b9746ffc1fed022_8 fill in the blank b9746ffc1fed022_9 Gain on Exchange of Equipment fill in the blank b9746ffc1fed022_11 fill in the blank b9746ffc1fed022_12 Cash fill in the blank b9746ffc1fed022_14 fill in the blank b9746ffc1fed022_15arrow_forward7.14 Alpha sells machine B for $50,000 cash on 30 April 20X4. Machine B cost $100,000 when it was purchased and has a carrying value of $65,000 at the date of disposal. What are the journal entries to record the disposal of machine B? A Dr Accumulated depreciation $35,000 Dr Loss on disposal (SPL) $15,000 Dr Cash $50,000 Cr Non-current assets – cost $100,000 B Dr Accumulated depreciation $65,000 Dr Loss on disposal (SPL) $35,000 Cr Non-current assets – cost $100,000 C Dr Accumulated depreciation $35,000 Dr Cash $50,000 Cr Non-current assets $65,000 Cr Profit on disposal (SPL) $20,000 D Dr Non-current assets $65,000 Dr Accumulated depreciation $35,000 Cr Cash $50,000 Cr Profit on disposal (SPL) $50,000arrow_forwardA new cash register was purchased on 1 April 200X for R5000 cash. This transaction has not yet been recorded in the accounting records. Which of the following amount represents the depreciation expense for the new cash register purchased on 1 April? A. R125 B. R167 C. R250 D. None of the abovearrow_forward
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