Exchanged the equipment for new equipment

Assignment Help Financial Accounting

Reference no: EM131287814

Jones Corp. purchased equipment for $45,000. Total depreciation of $36,000 was recorded. On January 1, 2017, Jones exchanged the equipment for new equipment, paying $56,000 cash. The market value of the new equipment is $65,000. Prepare the journal entry to record this transaction. Assume the exchange has commercial substance.

Equipment (new) xx

Accumulated Depreciation—Equipment xx

Equipment (old) xx

Cash xx

Explanation: Calculation of gain or loss on exchange:

Market value of assets received xx

Less:

Book value of asset exchanged xx

Cash paid xx (xx)

Gain or (Loss) $xx

Reference no: EM131287814

Questions Cloud

What is the organizational culture of accounting profession : What is the organizational culture of the accounting profession. What are the two primary advantages of the straight line method? Discuss contingencies in terms of their economic substance and their balance sheet presentation.

Improve the welfare of employee-investors is pension design : If employee-investors are unsophisticated and unlikely to be materially influenced by educational efforts, the best way to improve the welfare of employee-investors is pension design. Discuss.

Prepare a bank reconciliation and journal entries : The following information is extracted from the bank statement and the accounting records of Sun Corporation for the month of July, 2016: Prepare a bank reconciliation for Sun on July 31, 2016. Prepare the journal entries necessary to adjust Sun’s bo..

Used to establish fund for the grandchild : Ruth would like to establish a college fund of $20,000 for her grandson, age 1. She has heard about 529 plans and Coverdale college fund and is wondering how either could be used to establish a fund for the grandchild. Ruth is in a high tax bracket a..

Exchanged the equipment for new equipment : Jones Corp. purchased equipment for $45,000. Total depreciation of $36,000 was recorded. On January 1, 2017, Jones exchanged the equipment for new equipment, paying $56,000 cash. The market value of the new equipment is $65,000. Prepare the journal e..

Consolidated net income attributable to controlling interest : On January 1, 2012, Chamberlain Corporation pays $604,000 for a 60 percent ownership in Neville. Annual excess fair-value amortization of $22,400 results from the acquisition. On December 31, 2013, Neville reports revenues of $536,000 and expenses of..

Realized gains or losses on available-for-sale investments : Realized gains or losses on available-for-sale investments represent the difference between the Realized gains or losses on available-for-sale investments represent the difference between the historical cost and the average market value of the invest..

Order discharging the personal representative : If no federal estate tax return is required of the decedent's estate a. the Section 645 election is not available. b. the Section 645 election period begins on date of death. c. the Section 645 election period ends when the local probate court enters..

Income tax deduction for distributions to beneficiaries : Tom is the trustee of the Generous Trust. The trust agreement directs the trustee to pay all net fiduciary accounting at least annually to Ms. Behaven. During 2013 the trust earned $10,000 of net fiduciary accounting income, consisting of taxable bon..

User Account

All Pages