Question
Wildhorse Company exchanged equipment used in its manufacturing operations plus $3,240 in cash for similar equipment used in the operations of Sheffield Company. The following
Wildhorse Company exchanged equipment used in its manufacturing operations plus $3,240 in cash for similar equipment used in the operations of Sheffield Company. The following information pertains to the exchange.Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.
| Wildhorse Co. | Sheffield Co. | |||||
|---|---|---|---|---|---|---|
| Equipment (cost) | $30,240 | $30,240 | ||||
| Accumulated depreciation | 20,520 | 10,800 | ||||
| Fair value of equipment | 13,500 | 16,740 | ||||
| Cash given up | 3,240 | |||||
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
15th edition
978-1118159644, 9781118562185, 1118159640, 1118147294, 978-1118147290
