Cullumber Company exchanged equipment used in its manufacturing operations plus $4,320 in cash for similar equipment used in the operations of Riverbed Company. The following information pertains to the exchange. Cullumber Co. Riverbed Co.Equipment (cost) $40,320 $40,320 Accumulated depreciation 27,360 14,400 Fair value of equipment 18,000 22,320 Cash given up 4,320 (a) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks 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.)Account Titles and ExplanationDebitCreditCullumber Company: enter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountRiverbed Company: enter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amount eTextbook and MediaList of Accounts Attempts: 0 of 15 used (b) Prepare the journal entries to record the exchange on the books of both companies. Assume that 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.)Account Titles and ExplanationDebitCreditCullumber Company enter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountRiverbed Company enter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amount eTextbook and Media

Calculation of Gain or Loss: Cullumber Co. Riverbed Co. Fair Value of Old Equipment $18,000…

Answered: ullumber Company exchanged equipment…

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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(a)

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks 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.)

Account Titles and Explanation	Debit	Credit
Cullumber Company:
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
Riverbed Company:
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

Attempts: 0 of 15 used

(b)

Prepare the journal entries to record the exchange on the books of both companies. Assume that 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.)

Account Titles and Explanation	Debit	Credit
Cullumber Company
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
Riverbed Company
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

eTextbook and Media

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	Cullumber Co.	Riverbed Co.
Equipment (cost)	$40,320		$40,320
Accumulated depreciation	27,360		14,400
Fair value of equipment	18,000		22,320
Cash given up	4,320