Question
Cheyenne Company exchanged equipment used in its manufacturing operations plus $3,480 in cash for similar equipment used in the operations of Ayayai Company. The following
Cheyenne Company exchanged equipment used in its manufacturing operations plus $3,480 in cash for similar equipment used in the operations of Ayayai Company. The following information pertains to the exchange.
| CheyenneCo. | Ayayai Co. | |||||
|---|---|---|---|---|---|---|
| Equipment (cost) | $32,480 | $32,480 | ||||
| Accumulated depreciation | 22,040 | 11,600 | ||||
| Fair value of equipment | 14,500 | 17,980 | ||||
| Cash given up | 3,480 | |||||
1. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.
2. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
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Multicriteria Decision Making Systems Modeling Risk Assessment And Financial Analysis For Technical Projects
Authors: Timothy Havranek, Doug MacNair, James Wolf
3110765640, 978-3110765649
