Question
Sage Company exchanged equipment used in its manufacturing operations plus $3,060 in cash for similar equipment used in the operations of Pronghorn Company. The following
Sage Company exchanged equipment used in its manufacturing operations plus $3,060 in cash for similar equipment used in the operations of Pronghorn Company. The following information pertains to the exchange.
| Sage Co. | Pronghorn Co. | |||||
|---|---|---|---|---|---|---|
| Equipment (cost) | $28,560 | $28,560 | ||||
| Accumulated depreciation | 19,380 | 10,200 | ||||
| Fair value of equipment | 12,750 | 15,810 | ||||
| Cash given up | 3,060 | |||||
Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Wiley Federal Government Auditing Laws Regulations Standards And Practices
Authors: Edward F. Kearney, Roldan Fernandez, Jeffrey W. Green, David M. Zavada
2nd Edition
1118555856, 978-1118555859
