On January 2, Bering Co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625. Prepare the entries to record the disposal under each separate situation. 1. The machine is sold for $18,250 cash. 2. The machine is traded in for a new machine having a $60,200 cash price. A $25,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. 3. The machine is traded in for a new machine having a $60,200 cash price. A $15,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
On January 2, Bering Co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625. Prepare the entries to record the disposal under each separate situation. 1. The machine is sold for $18,250 cash. 2. The machine is traded in for a new machine having a $60,200 cash price. A $25,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. 3. The machine is traded in for a new machine having a $60,200 cash price. A $15,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 2, Bering Co. disposes of a machine costing $44,000 with
$24,625. Prepare the entries to record the disposal under each separate situation.
1. The machine is sold for $18,250 cash.
2. The machine is traded in for a new machine having a $60,200 cash price. A $25,000 trade-in allowance
is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
3. The machine is traded in for a new machine having a $60,200 cash price. A $15,000 trade-in allowance
is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.
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