The production manager of Culver Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Culver a similar machine plus $24,610 in exchange for Culver's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. 3. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,560 cash in addition to Culver's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 4. The production manager has also contacted Ansong Corporation a dealer in machines. To obtain a new machine from Ansong, Culver would have to pay $99,510 and also trade in its old machine. Culver's equipment has a cost of $171,200, a net book value of $117.700, and a fair value of $98,440. The following table shows the information needed to record the machine exchange between the companies: Machine cost Accumulated depreciation--machinery Fair value Secord Bateman Shripad Ansong $128,400 $157.290 $171.200 $139.100 48.150 75.970 80.250 -0- 73.830 98,440 107.000 197.950 For each of the four independent situations, assume that Culver accepts the offer. Prepare the journal entries to record the exchange on the books of each company. Assume that transactions 2 and 3 lack commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Transaction 1: Culver Corporation Account Titles and Explanation Debit Credit Accumulated Depreciation - Machinery Machinery Cash Loss on Disposal of Machinery Machine Transaction 2: Culver Corporation Account Titles and Explanation Debit Credit Bateman Company Account Titles and Explanation Debit Credit Transaction 3 Culver Corporation Account Titles and Explanation Debit Credit Shripad Company Account Titles and Explanation Debit Credit Transaction 4 Culver Corporation Account Titles and Explanation Debit Credit Ansong Corporation Account Titles and Explanation Debit Credit (To record sale with trade-in) (To record cost of goods sold.) e Textbook and Media List of Accounts The production manager of Culver Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Culver a similar machine plus $24,610 in exchange for Culver's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. 3. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $8,560 cash in addition to Culver's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 4. The production manager has also contacted Ansong Corporation a dealer in machines. To obtain a new machine from Ansong, Culver would have to pay $99,510 and also trade in its old machine. Culver's equipment has a cost of $171,200, a net book value of $117.700, and a fair value of $98,440. The following table shows the information needed to record the machine exchange between the companies: Machine cost Accumulated depreciation--machinery Fair value Secord Bateman Shripad Ansong $128,400 $157.290 $171.200 $139.100 48.150 75.970 80.250 -0- 73.830 98,440 107.000 197.950 For each of the four independent situations, assume that Culver accepts the offer. Prepare the journal entries to record the exchange on the books of each company. Assume that transactions 2 and 3 lack commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Transaction 1: Culver Corporation Account Titles and Explanation Debit Credit Accumulated Depreciation - Machinery Machinery Cash Loss on Disposal of Machinery Machine Transaction 2: Culver Corporation Account Titles and Explanation Debit Credit Bateman Company Account Titles and Explanation Debit Credit Transaction 3 Culver Corporation Account Titles and Explanation Debit Credit Shripad Company Account Titles and Explanation Debit Credit Transaction 4 Culver Corporation Account Titles and Explanation Debit Credit Ansong Corporation Account Titles and Explanation Debit Credit (To record sale with trade-in) (To record cost of goods sold.) e Textbook and Media List of Accounts