Briyanne, Inc. purchased a computer for RM5,000. During 2016 and 2017, the company recorded total depreciation of RM4,000 on the computer. On January 1, 2018, the company exchanges the computer for a new one, paying RM4,000 cash. The market value of the new computer is RM6,000. Assume the exchange has commercial substance. Based on the information above: a) Calculate the gain or loss of the exchange. b) Determine the journal entries involved.
Briyanne, Inc. purchased a computer for RM5,000. During 2016 and 2017, the company recorded total depreciation of RM4,000 on the computer. On January 1, 2018, the company exchanges the computer for a new one, paying RM4,000 cash. The market value of the new computer is RM6,000. Assume the exchange has commercial substance. Based on the information above: a) Calculate the gain or loss of the exchange. b) Determine the journal entries involved.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Briyanne, Inc. purchased a computer for RM5,000. During 2016 and 2017, the company
recorded total depreciation of RM4,000 on the computer. On January 1, 2018, the
company exchanges the computer for a new one, paying RM4,000 cash. The market value
of the new computer is RM6,000. Assume the exchange has commercial substance.
Based on the information above:
(a)
Calculate the gain or loss of the exchange.
(b)
Determine the journal entries involved.
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