Crane Corporation wishes to exchange a machine used in its operations. Crane has received the following offers from other companies in the industry. 1. Cheyenne Company offered to exchange a similar machine plus $23,460. (The exchange has commercial substance for both parties) 2 3. Ayayal Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) Pina Company offered to exchange a similar machine, but wanted $3,060 in addition to Crane's machine. (The exchange has commercial substance for both parties.) In addition, Crane contacted Grouper Corporation, a dealer in machines. To obtain a new machine. Crane must pay $94,860 in addition to trading in its old machine. Machine cost Accumulated depreciation Fair value Crane $163.200 61,200 93,840 Cheyenne $122,400 45,900 70,380 Pina Ayayal $155,040 $163,200 72,420 76,500 93,840 96,900 Grouper $132.600 -0- 188,700 For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts List all debit entries before
Crane Corporation wishes to exchange a machine used in its operations. Crane has received the following offers from other companies in the industry. 1. Cheyenne Company offered to exchange a similar machine plus $23,460. (The exchange has commercial substance for both parties) 2 3. Ayayal Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) Pina Company offered to exchange a similar machine, but wanted $3,060 in addition to Crane's machine. (The exchange has commercial substance for both parties.) In addition, Crane contacted Grouper Corporation, a dealer in machines. To obtain a new machine. Crane must pay $94,860 in addition to trading in its old machine. Machine cost Accumulated depreciation Fair value Crane $163.200 61,200 93,840 Cheyenne $122,400 45,900 70,380 Pina Ayayal $155,040 $163,200 72,420 76,500 93,840 96,900 Grouper $132.600 -0- 188,700 For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts List all debit entries before
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Crane Corporation wishes to exchange a machine used in its operations. Crane has received the following offers from other companies
in the industry.
1. Cheyenne Company offered to exchange a similar machine plus $23,460. (The exchange has commercial substance for both
parties.)
2
3.
Ayayai Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
Pina Company offered to exchange a similar machine, but wanted $3,060 in addition to Crane's machine. (The exchange has
commercial substance for both parties.)
In addition, Crane contacted Grouper Corporation, a dealer in machines. To obtain a new machine. Crane must pay $94,860 in addition
to trading in its old machine.
Machine cost
Accumulated depreciation
Fair value
Crane
$163,200
61,200
93,840
Cheyenne
$122,400
45,900
70,380
Pina
Ayayai
$155,040 $163,200
76,500
96,900
72,420
93,840
Grouper
$132.600
-0-
188,700
For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (Credit
account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts. List all debit entries before credit entries.)
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