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 (fa 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. Assume the exchange has commercial substance. a. Journalize the entry to record the current depreciation of the old equipment to the date of trade-in. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the exchange transaction on July 1. If an amount box does not require an entry, leave it blank. EE
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 (fa 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. Assume the exchange has commercial substance. a. Journalize the entry to record the current depreciation of the old equipment to the date of trade-in. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the exchange transaction on July 1. If an amount box does not require an entry, leave it blank. EE
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter2: Asset And Liability Valuation And Income Recognition
Section: Chapter Questions
Problem 5QE
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