Question
Ramirez Company exchanged equipment used in its manufacturing operations plus $6,000 in cash for similar equipment used in the operations of Kennedy Company. The following
Ramirez Company exchanged equipment used in its manufacturing operations plus $6,000 in cash for similar equipment used in the operations of Kennedy Company. The following information pertains to the exchange.
Ramirez Co Kennedy Co
Equipment (cost) 84,000 $84,000
Accumulated depreciation 57,000 30,000
Fair value of equipment 40,500 46,500
Cash given up 6,000
Instructions
Prepare the journal entries to record the exchange on the books of both companies. Assume that exchange lacks commercial substance.
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Financial Accounting Longman Modular Texts In Business And Economics
Authors: Christopher Waterston, Anne Britton
2nd Edition
058238169X, 978-0582381698
