Computer equipment-prepare the potential journal entries

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Reference no: EM13827036

Jane asked the IT department to give her a price list for the new computer equipment. The following information was provided:

a. 14 new computers- $140,000. Additionally, P&P would have to pay $2,000 for freight and 6% tax on $140,000. The estimated useful life is 5 years, with a 5% salvage value. The computers are treated as a signle unit for financial reporting purposes.

b. 10 existing computers, with a total trade-in value of $10,000, will be traded for the new computers. The computers are treated as a single unit for financial reporting purposes. These computers have an original cost of $80,000 and a book value of $8,000. The remainder of the purchase price on the new computers will be paid in cash.

c. Additional IT personnel to support the increased workload created by the HR department- $200,000 annually. This amount includes fringe benefits and taxes.

Prepare the potential journal entries for the above items assuming that the exhange is considered to have commercial substance.

Reference no: EM13827036

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