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Buffalo SpA, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, broke it. Buffalo gave the machine plus €496 to Carla Business Machine AG (dealer) in exchange for a new machine. Assume the following information about the machines. Buffalo SpA (Old Machine) Carla AG (New Machine) Machine cost €423 €394 Accumulated depreciation 204 -0- Fair value 125 621 For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Include in your journal entry separate account entries for both the new and old machinery and inventory. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Buffalo SpA Machinery Debit 621 Credit

Buffalo SpA, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, broke it. Buffalo gave the machine plus €496 to Carla Business Machine AG (dealer) in exchange for a new machine. Assume the following information about the machines. Buffalo SpA (Old Machine) Carla AG (New Machine) Machine cost €423 €394 Accumulated depreciation 204 -0- Fair value 125 621 For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Include in your journal entry separate account entries for both the new and old machinery and inventory. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Buffalo SpA Machinery Debit 621 Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Buffalo SpA, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, broke it. Buffalo gave the machine plus €496 to Carla Business Machine AG (dealer) in exchange for a new machine. Assume the following information about the machines. Buffalo SpA (Old Machine) Carla AG (New Machine) Machine cost €423 €394 Accumulated depreciation 204 -0- Fair value 125 621 For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Include in your journal entry separate account entries for both the new and old machinery and inventory. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Buffalo SpA Machinery Debit 621 Credit
Transcribed Image Text:Buffalo SpA, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, broke it. Buffalo gave the machine plus €496 to Carla Business Machine AG (dealer) in exchange for a new machine. Assume the following information about the machines. Buffalo SpA (Old Machine) Carla AG (New Machine) Machine cost €423 €394 Accumulated depreciation 204 -0- Fair value 125 621 For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Include in your journal entry separate account entries for both the new and old machinery and inventory. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Buffalo SpA Machinery Debit 621 Credit
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