Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Unipal Company exchanged an old forklift with an original cost of $20,000, accumulated depreciation to date of $15,000, and a fair value of $6,000. The

Unipal Company exchanged an old forklift with an original cost of $20,000, accumulated depreciation to date of $15,000, and a fair value of $6,000. The new forklift list price is $25,000. A trade-in allowance of $7,000 was given for the old forklift.
Which of the following is the correct journal entry to record the exchange?
Select one:
a. New Equipment 38,000
Old Equipment 20,000
Cash 18,000
b. New Equipment 23,000
Accumulated Depreciation 15,000
Old Equipment 20,000
Cash 17,000
Gain on Disposal 1,000
c. New Equipment 24,000
Accumulated Depreciation 15,000
Old Equipment 20,000
Gain on Disposal 1,000
Cash 18,000
d. New Equipment 23,000
Accumulated Depreciation 15,000
Equipment 20,000
Cash 18,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting In A Nutshell Accounting For The Non-specialist

Authors: Walker, Janet

3rd Edition

075068738X, 9780750687386

More Books

Students also viewed these Accounting questions