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: DenverBristolCost$100,000$62,000Accumulated depreciation50,00025,000Fair value43,00045,000 Required: Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.CHART OF ACCOUNTSDenver & BristolGeneral Ledger ASSETS111Cash121Accounts Receivable141Inventory152Prepaid Insurance181Building (Warehouse (new))182Building (Warehouse (old))185Equipment198Accumulated Depreciation LIABILITIES211Accounts Payable231Salaries Payable250Unearned Revenue261Income Taxes Payable EQUITY311Common Stock331Retained Earnings REVENUE411Sales Revenue882Gain on Exchange EXPENSES500Cost of Goods Sold511Insurance Expense512Utilities Expense521Salaries Expense532Bad Debt Expense540Interest Expense541Depreciation Expense559Miscellaneous Expenses892Loss on Exchange910Income 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. DATEACCOUNT TITLEPOST. REF.DEBITCREDIT1 2 3 4 5

The exchange of assets is calculated on the basis of book value and the fair value of new assets. If…

Answered: wo independent companies, Denver and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

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
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.

CHART OF ACCOUNTSDenver & BristolGeneral Ledger

	ASSETS
111	Cash
121	Accounts Receivable
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	Retained Earnings

	REVENUE
411	Sales Revenue
882	Gain on Exchange

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
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.

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions