gummiesweets
Mar 23, 2010, 05:48 PM
Corans delivery company and Enrights express delivery exchanged delivery trucks on Jan 1, 2008. Corans truck cost 22,000. It has accumulated depreciation of 15,000 and a fair market value of $4000. Enrights truck cost 10,000. It has accumulated depreciation of 8,000 and a fair market value of 4,000. The transaction has commercial substance.
A) Journalize the exchange for Corans Delivery company
B) Journalize the exchange for Enrights Express delivery
This was what I got for the problem
A)
Cost of Corans Truck... 22,000
Less: Accumulated Depreciation... 15,000
Book Value... 7,000 (22,000-15,000)
Fair market value of Corans truck... 4,000
Loss on Disposal... 3000 (7,000-4,000)
Fair market value of Corans truck... 4,000
Cash paid... 10,000
Cost of Enrights truck... 14,000(10,000+4,000)
Journal Entry:
Dr. Enrights truck 14,000
Dr. Accumulated Deprecation 15,000
Dr. Loss on Disposal 3,000
Cr. Corans truck 22,000
Cr. Cash 10,000
The problem I'm not sure is the cash paid part? I just used 10,000 from the amount of Enrights truck cost.
B)
Cost of Enrights truck... 10,000
Less: Accumulated Depreciation... 8,000
Book Value... 2,000 (10,000-8,000)
Fair market value of Enrights truck... 4,000
Gain on disposal... (4,000-2000)
Fair market value of Enrights truck... 4,000
Cash paid... 22,000
Cost of Corans Truck... 26,000 (4,000 + 22,000)
Journal Entry:
Dr. Corans truck... 26,000
Dr. Accumulated Depreciation... 8,000
Cr. Gain on Disposal... 2,000
Cr. Enrights truck... 10,000
Cr. Cash... 22,000
Also same thing, I don't know if cash paid part is right? I used 22,000 from the amount of Corans truck cost.
A) Journalize the exchange for Corans Delivery company
B) Journalize the exchange for Enrights Express delivery
This was what I got for the problem
A)
Cost of Corans Truck... 22,000
Less: Accumulated Depreciation... 15,000
Book Value... 7,000 (22,000-15,000)
Fair market value of Corans truck... 4,000
Loss on Disposal... 3000 (7,000-4,000)
Fair market value of Corans truck... 4,000
Cash paid... 10,000
Cost of Enrights truck... 14,000(10,000+4,000)
Journal Entry:
Dr. Enrights truck 14,000
Dr. Accumulated Deprecation 15,000
Dr. Loss on Disposal 3,000
Cr. Corans truck 22,000
Cr. Cash 10,000
The problem I'm not sure is the cash paid part? I just used 10,000 from the amount of Enrights truck cost.
B)
Cost of Enrights truck... 10,000
Less: Accumulated Depreciation... 8,000
Book Value... 2,000 (10,000-8,000)
Fair market value of Enrights truck... 4,000
Gain on disposal... (4,000-2000)
Fair market value of Enrights truck... 4,000
Cash paid... 22,000
Cost of Corans Truck... 26,000 (4,000 + 22,000)
Journal Entry:
Dr. Corans truck... 26,000
Dr. Accumulated Depreciation... 8,000
Cr. Gain on Disposal... 2,000
Cr. Enrights truck... 10,000
Cr. Cash... 22,000
Also same thing, I don't know if cash paid part is right? I used 22,000 from the amount of Corans truck cost.