wo independent companies, Denver and Bristol, each own a warehouse, and Denver agrees to pay Bristol $2,000 to complete the exchange. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $62,000 Accumulated depreciation 50,000 25,000 Fair value 43,000 45,000 Required: Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.
wo independent companies, Denver and Bristol, each own a warehouse, and Denver agrees to pay Bristol $2,000 to complete the exchange. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $62,000 Accumulated depreciation 50,000 25,000 Fair value 43,000 45,000 Required: Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
wo independent companies, Denver and Bristol, each own a warehouse, and Denver agrees to pay Bristol $2,000 to complete the exchange. The following information for the two warehouses is available:
|
|
Denver
|
Bristol
|
| Cost | $100,000 | $62,000 |
| 50,000 | 25,000 | |
| Fair value | 43,000 | 45,000 |
Required:
| Assuming the exchange has commercial substance, prepare |
CHART OF ACCOUNTSDenver & BristolGeneral Ledger
| ASSETS | |
| 111 | Cash |
| 121 | |
| 141 | Inventory |
| 152 | Prepaid Insurance |
| 181 | Building (Warehouse (new)) |
| 182 | Building (Warehouse (old)) |
| 185 | Equipment |
| 198 | Accumulated Depreciation |
| LIABILITIES | |
| 211 | Accounts Payable |
| 231 | Salaries Payable |
| 250 | Unearned Revenue |
| 261 | Income Taxes Payable |
| EQUITY | |
| 311 | Common Stock |
| 331 |
| REVENUE | |
| 411 | Sales Revenue |
| 882 | Gain on Exchange |
| EXPENSES | |
| 500 | Cost of Goods Sold |
| 511 | Insurance Expense |
| 512 | Utilities Expense |
| 521 | Salaries Expense |
| 532 | |
| 540 | Interest Expense |
| 541 | Depreciation Expense |
| 559 | Miscellaneous Expenses |
| 892 | Loss on Exchange |
| 910 | Income Tax Expense |
Assume the exchange has commercial substance and occurred on April 1. Prepare journal entries for Denver and Bristol to record the exchange.
General Journal Instructions
All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.
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