[socialight]

Machinery acquired at a cost of $100,000 and on which there is accumulted depreciation of $60,000(including depreciation for the current year to date)is exchanged for similar machinery. For financial reporting purposes, present entries to record the dispositions of the old machinery and the acqusition of new machinery under each of the following assumptions
1. price of new, $120,000; trade in allowance on old, $4000; balance paid in cash
2. price of new $120,000; trade in allowance on old, $44000; balance paid in cash


This is my last question please help

[Gator1087]

It all depends on whether the question was updated for FASB 153 or not. From the way the question was asked it sounds like it wasn't because the question said the assets were similar, which is only pertinent under the old method, but there was cash involved, which is what you would need to solve it under the new method. I don't want to tell you the wrong answer because the journalizing is different for each method, so try to find out and I'll try to help you.