Sunland Corporation, 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, managed to break the machine. SunlandCorporation gave the machine plus $428 to Coronado Business Machine Company (dealer) in exchange for a newmachine. Assume the following information about the machines.Machine costAccumulated depreciationFair valueSunlandCorp.(OldMachine)$365Account Titles and ExplanationSunland Corporation176Coronado Business Machine Company.108Coronado Co.(NewMachine)$340-0-For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercialsubstance.) (Credit account titles are automatically indented when amount is entered. Do not indentmanually. If no entry is required, select "No Entry for the account titles and enter 0 for theamounts. List all debit entries before credit entries.)536DebitCreditIII17

Solutions:-Preparation of journal entry to record the exchange as follows under:-In the books of…

Answered: first day of work, the ac long, the…

Business

Accounting

first day of work, the ac long, the accountant, wh ation gave the machine e. Assume the following

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

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

100%

Sunland Corporation, 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, managed to break the machine. Sunland
Corporation gave the machine plus $428 to Coronado Business Machine Company (dealer) in exchange for a new
machine. Assume the following information about the machines.
Machine cost
Accumulated depreciation
Fair value
Sunland
Corp.
(Old
Machine)
$365
Account Titles and Explanation
Sunland Corporation
176
Coronado Business Machine Company.
108
Coronado Co.
(New
Machine)
$340
-0-
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. If no entry is required, select "No Entry for the account titles and enter 0 for the
amounts. List all debit entries before credit entries.)
536
Debit
Credit
III
17

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