Crane Ltd. purchased an electric wax melter on April 30, 2023, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase: List price of new melter Cash paid Cost of old melter (5-year life, $690 residual value) Accumulated depreciation on old melter (straight-line) Market value of old melter in active secondary market Account Titles and Explanation $16,000 (To record depreciation expense to date of exchange) 6,500 12,690 7,200 Assuming that Crane's fiscal year ends on December 31 and depreciation has been recorded through December 31, 2022, prepare the journal entries that are necessary to record this exchange. (Credit account titles are automatically indented when the 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.) 6,080 Debit Credit

Crane Ltd. purchased an electric wax melter on April 30, 2023, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase: List price of new melter Cash paid Cost of old melter (5-year life, $690 residual value) Accumulated depreciation on old melter (straight-line) Market value of old melter in active secondary market Account Titles and Explanation $16,000 (To record depreciation expense to date of exchange) 6,500 12,690 7,200 Assuming that Crane's fiscal year ends on December 31 and depreciation has been recorded through December 31, 2022, prepare the journal entries that are necessary to record this exchange. (Credit account titles are automatically indented when the 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.) 6,080 Debit Credit

Name: Crane Ltd. purchased an electric wax melter on April 30, 2023, by tra
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Description: Crane Ltd. purchased an electric wax melter on April 30, 2023, by trading in its old gas model and paying the balance in cash. Thefollowing data relate to the purchase:List price of new melterCash paidCost of old melter (5-year life, $690 residual v

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

Topic Video

Question

Crane Ltd. purchased an electric wax melter on April 30, 2023, by trading in its old gas model and paying the balance in cash. The
following data relate to the purchase:
List price of new melter
Cash paid
Cost of old melter (5-year life, $690 residual value)
Accumulated depreciation on old melter (straight-line)
Market value of old melter in active secondary market
Account Titles and Explanation
(To record depreciation expense
to date of exchange)
$16,000
Assuming that Crane's fiscal year ends on December 31 and depreciation has been recorded through December 31, 2022, prepare the
journal entries that are necessary to record this exchange. (Credit account titles are automatically indented when the 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.)
(To record equipment exchange)
6,500
12,690
7,200
6,080
Debit
TUOT
Credit
www.

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