Equipment costing $72,000 has accumulated depreciation of $60,000. The equipment is a trade-in for new equipment costing $85,334. If the trade-in value received for the old equipment is $10,000, the journal entry to record this transaction is to:
A) debit Equipment (new) $85,334, credit Cash $85,334.
B) debit Equipment (New) for $85,334, debit Accumulated Depreciation – Equipment for $60,000, credit Equipment (Old) for $72,000 and credit Cash for $85,334.
C) debit Equipment (New) for $85,334, debit Accumulated Depreciation – Equipment for $60,000, debit Loss on Exchange of Assets for $12,000, credit Equipment (Old) for $72,000, credit Cash for $85,334.
D) debit Equipment (New) for $85,334, debit Accumulated Depreciation – Equipment for $60,000, debit Loss on Exchange of Assets for $2,000, credit Equipment (Old) for $72,000 and credit Cash for $75,334.
D) debit Equipment (New) for $85,334, debit Accumulated Depreciation – Equipment for $60,000, debit Loss on Exchange of Assets for $2,000, credit Equipment (Old) for $72,000 and credit Cash for $75,334.
Explanation: subtract trade in value from cost for Cash credit amount; subtract credits from debits for loss amount.
Ex: $85,334 - $10,000 = $75,334 (cash); $V4 (acc depreciation) + $85,334 (new equipment) - $72,000 (equipment old) - $75,334 (cash) = ($2,000 loss)
You might also like to view...
The unexpired cost of a plant asset is referred to as its
A) depreciable cost. B) carrying value. C) accumulated depreciation. D) original cost.
Which of the following statements about mobile Web sites is not true?
A) Mobile Web sites run on a firm's servers, just like a traditional Web site. B) Mobile Web sites can be built using standard Web tools such as server-side HTML, Linux, PHP and SQL. C) Generally, mobile Web sites operate more quickly than traditional Web sites viewed on a desktop computer connected to a broadband office network. D) Most large firms today have mobile Web sites.
Suppliers include not only companies that provide materials and components, but also distributors, transportation companies, and information, health care, and education providers
a. True b. False Indicate whether the statement is true or false
When making a request for organizational resources, it is appropriate to show that you have thought through the impact of your request on other areas and departments within your organization.
Answer the following statement true (T) or false (F)