Subject 3 (25%) A. On March 1, 2018, CBS acquired a machine for 50,000 in cash. The estimated useful life was 10 years while the anticipated salvage value was 2,000. Below are presented a set of independent situations:

1. The machine is completely destroyed by a fire on June 1, 2021. CBS is entitled of an insurance settlement of 30,000. Assume that the settlement was received during the next fiscal period.

2. On November 1, 2022, CBS sold the machine for 32,000 for cash to XZY company.

3. On July 1, 2020, CBS trades its machine for a new equipment of XZY. The exchange lacks commercial substance.

Required: For each independent situation, present the journal entries to be made to record each transaction. (18%) Additional information

a. Assume that CBS uses the straight-line depreciation method.

b. The fiscal year of CBS commences on January 1 and ends on December 31 of each year