Can you please correct this questions and provide step by step calculations ?
On September 1, 2015, XYZ Co. exchanges two small pieces of equipment (A and B) for a larger one (C) from JenCo. JenCo produces equipment and classifies all equipment as inventory. JenCo has agreed to take the equipment A and B, and pay XYZ Co. $3,500 cash in exchange for the equipment C. quipment C cost $210,000 to manufacture. Following is information regarding the exchange. XYZ Co. JenCo Equipment A at cost $135,000 Accumulated depreciation, equipment, A 14,000 Fair value equipment A. 123,500 Equipment B at cost. 145,000 Accumulated depreciation, equipment, B 19.000 Fair value equipment B 120,000 Fair value equipment C $240.000 Cash paid 3,500 Cash received 3,500 Please make sure your final answer(s) are accurate to 2 decimal places. (a) Record the journal entry for the exchange on the books of both XYZ Co. and JenCo. Assume the exchange has commercial substance. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). XYZ Co. General Journal Page G1 Date Account/Explanation PR Debit Credit 1/Sep Equipment, 240,000 Accumulated depreciation, equipment, A 14,000 Accumulated depreciation, equipment, B 19,000 Equipment, A 135,000 Equipment, B 145,000 Cash 3,500 Gain/loss on disposal, equipment, A 5,062 Gain/loss on disposal, equipment, B. 5,437 To record exchange of equipment A and B for C Marking: You have entered the correct amount for 'Cash', however it should have been entered as a debit. This will cost you 1 mark. 'Gain/loss on disposal, equipment, B' should be debited for the amount of $6,000, but you have not done this. This will cost you 1 mark. 'Gain/loss on disposal, equipment, A' should be credited for the amount of $2,500, but you have not done this. This will cost you 1 mark. You have not placed all accounts which are debited before those which are credited, however you will not lose any marks for this. JenCo General Journal Page 61 Date Account/Explanation PR Debit Credit 1/Sep Equipment, C. 240,000 Accumulated depreciation, equipment, A 14,000 Accumulated depreciation, equipment, B 19,000 Equipment, A. 135,000 Equipment, B. 145,000 Cash 3,500 Gain/loss on disposal, equipment, A 5,062 Gain/loss on disposal, equipment, B 5,437 To record exchange of equipment A and B for C Marking: You have not included the 'Inventory (Used)' account in this journal entry. This will cost you 2 marks. You have not included the 'Cost of goods sold' account in this journal entry. This will cost you 2 marks. You have entered the correct amount for 'Cash', however it should have been entered as a credit. This will cost you 1 mark. You have not included the 'Sales' account in this journal entry. This will cost you 2 marks. You have not included the 'Inventory (New)' account in this journal entry. This will cost you 2 marks. You have entered 8 accounts in this journal entry when only 5 were required. This will cost you 3 marks. The following accounts should not have been included in this journal entry: Equipment, C, Accumulated depreciation, equipment, A, Accumulated depreciation, equipment, B, Equipment, A, Equipment, B, Gain/loss on disposal, equipment, A, Gain/loss on disposal, equipment, B. Any amounts entered for these accounts will not be evaluated. You have not placed all accounts which are debited before those which are credited, however you will not lose any marks for this. (b) Record the journal entry for the exchange on the books of both XYZ Co. and JenCo. Assume the exchange does not have commercial substance. XYZ Co. General Journal Page G2 Date Account/Explanation PR Debit Credit 1/Sep Equipment, C 240,000 Accumulated depreciation, equipment, A 14,000 Accumulated depreciation, equipment, B 19,000 Equipment, A. 135,000 Equipment, B. 145,000 Cash 3,500 Gain/loss on disposal, equipment, A. 5,062 Gain/loss on disposal, equipment, B. 5,437 To record exchange of equipment A and B for C Marking: 'Equipment, C' should be debited for the amount of $237,500, but you have not done this. This will cost you 1 mark. You have entered the correct amount for 'Cash', however it should have been entered as a debit. This will cost you 1 mark. 'Gain/loss on disposal, equipment, B' should be debited for the amount of $6,000, but you have not done this. This will cost you 1 mark. You have entered 8 accounts in this journal entry when only 7 were required. This will cost you 1 mark. 'Gain/loss on disposal, equipment, A' should not have been included in this journal entry. Any amounts entered for this account will not be evaluated. You have not placed all accounts which are debited before those which are credited, however you will not lose any marks for this. JenCo General Journal Page G2 Date Account/Explanation PR Debit Credit 1/Sep Equipment, C. 240,000 Accumulated depreciation, equipment, A 14,000 Accumulated depreciation, equipment, B 19,000 Equipment, A. 135,000 Equipment, B. 145,000 Cash 3,500 Gain/loss on disposal, equipment, A. 5,062 Gain/loss on disposal, equipment, B 5,437 To record exchange of equipment A and B for C Marking: You have not included the 'Inventory (Used)' account in this journal entry. This will cost you 2 marks. You have entered the correct amount for 'Cash', however it should have been entered as a credit. This will cost you 1 mark. You have not included the 'Inventory (New)' account in this journal entry. This will cost you 2 marks. You have entered 8 accounts in this journal entry when only 3 were required. This will cost you 5 marks. The following accounts should not have been included in this journal entry: Equipment, C, Accumulated depreciation, equipment, A, Accumulated depreciation, equipment, B, Equipment, A, Equipment, B, Gain/loss on disposal, equipment, A, Gain/loss on disposal, equipment, B. Any amounts entered for these accounts will not be evaluated. You have not placed all accounts which are debited before those which are credited, however you will not lose any marks for this
