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Provide the entry to record the transaction in adeline books

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Reference no: EM132672640

ABC Company traded a used equipment for a newer model with Adeline, a dealer.

Old equipment:

Original cost 1,000,000

Accumulated depreciation 500,000

Trade-in value 400,000

New equipment:

List Price 1,600,000

Cash Price without trade-in 1,350,000

Cash Payment with trade-in 950,000

Required:

Problem 1. What is the initial carrying amount of the new equipment acquired by ABC Company?

Problem 2. Describe and compute for the amount to be presented as component of profit or loss as a result of the transaction in ABC's statement of comprehensive income.

Problem 3. If the fair value of the old equipment cannot be determined reliably, would your answer be the same in number 1? If "yes", why? If "no", give the correct amount.

Problem 4. Provide the entry to record the transaction in Adeline's books

Reference no: EM132672640

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