Question
23-1) Metro Industries trades its used machine for a new model at Denver Inc. The used machine has a book value of $8,000 (cost $12,000
23-1) Metro Industries trades its used machine for a new model at Denver Inc. The used machine has a book value of $8,000 (cost $12,000 less $4,000 accumulated depreciation) and a fair value of $6,000.The new model has a fair value of $16,000.
A) How much does Metro have to pay to or receive from Denver?Why?
B) Prepare Metro's journal entry to record this exchange. Assume the exchange has commercial substance>
23-2) Metro Inc. trades its used machine for a new model at Denver Co. The used machine has a book value of $42,000 (cost $64,000 less $22,000 accumulated depreciation) and a fair value of $49,000.In addition to the machine, Metro must pay $11,000 cash to Denver.
A) Prepare the necessary journal entry by Metro to record this exchange.Assume the exchange has commercial substance.
B) Prepare the necessary journal entry by Metro to record this exchange.Assume the exchange has no commercial substance.
23-3) Metro Inc. trades its used machine for a new model at Denver Co. The used machine has a book value of $42,000 (cost $64,000 less $22,000 accumulated depreciation) and a fair value of $49,000.Metro receives $11,000 cash from Denver.
Prepare the necessary journal entry by Metro to record this exchange.Assume the exchange has no commercial substance.
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
13th Edition
978-0073379616, 73379611, 978-0697789938
