The production manager of Flint 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 Flint a similar machine plus $24,840 in exchange for Flints 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 $8,640 cash in addition to Flints 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, Flint would have to pay $100,440 and also trade in its old machine.

Flints equipment has a cost of $172,800, a net book value of $118,800, and a fair value of $99,360. The following table shows the information needed to record the machine exchange between the companies:

		Secord		Bateman		Shripad		Ansong
Machine cost		$129,600		$158,760		$172,800		$140,400
Accumulated depreciationmachinery		48,600		76,680		81,000		-0-
Fair value		74,520		99,360		108,000		199,800

For each of the four independent situations, assume that Flint 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.

Transaction 1:

Flint Corporation
Account Titles and Explanation	Debit	Credit

Flint Corporation
Account Titles and Explanation	Debit	Credit

Transaction 2:

Bateman Company
Account Titles and Explanation	Debit	Credit

Transaction 3:

Flint Corporation
Account Titles and Explanation	Debit	Credit

Shripad Company
Account Titles and Explanation	Debit	Credit

Transaction 4:

Flint 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.)

There will be scenarios or situations where different entries would be appropriate. Prepare the journal entries for transactions 2 and 3 assuming that they have commercial substance for Bateman Company and Shripad Company respectively. Transaction 2:

Flint Corporation
Account Titles and Explanation	Debit	Credit

Bateman Company
Account Titles and Explanation	Debit	Credit

Transaction 3:

Flint Corporation
Account Titles and Explanation	Debit	Credit

Shripad Company
Account Titles and Explanation	Debit	Credit