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dric Company recently traded in an older model of equipment for a new model. The old model’s book value was $180,000 (original cost of $400,000 less $220,000 in accumulated depreciation) and its fair value was $170,000. Cedric paid $60,000 to complete the exchange which has commercial substance. Required: Equipment - new                          ___?___ Accumulated depreciation           220,000 Loss on exchange of assets        10,000 Cash                                                                    60,000 Equipment - old                                                  400,000

dric Company recently traded in an older model of equipment for a new model. The old model’s book value was $180,000 (original cost of $400,000 less $220,000 in accumulated depreciation) and its fair value was $170,000. Cedric paid $60,000 to complete the exchange which has commercial substance. Required: Equipment - new                          ___?___ Accumulated depreciation           220,000 Loss on exchange of assets        10,000 Cash                                                                    60,000 Equipment - old                                                  400,000

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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Cedric Company recently traded in an older model of equipment for a new model. The old model’s book value was $180,000 (original cost of $400,000 less $220,000 in accumulated depreciation) and its fair value was $170,000. Cedric paid $60,000 to complete the exchange which has commercial substance.
Required:
Equipment - new                          ___?___
Accumulated depreciation           220,000
Loss on exchange of assets        10,000
Cash                                                                    60,000
Equipment - old                                                  400,000

 

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