Ask question

Ask question

All categories

3 years ago

7

1On January 3, Carothers Corporation acquired $200,000 in new equipment in exchange for cash of $170,000 cash and a trade-in of

old equipment. That old equipment originally cost $180,000 and had accumulated depreciation of $160,000; it had a book value of $20,000 at the time of exchange. This exchange of assets has commercial substance. The Cash account will be credited for $170,000. (That credit could not be shown below.) Prepare the journal entry.

1 answer:

stich3 [128]3 years ago

8 0

Answer:

The journal entry:

Debit Accumulated depreciation $160,000

Debit Equipment $200,000

Credit Cash $170,000

Credit Equipment $180,000

Credit Gain on exchange asset $10,000

Explanation:

The old equipment had a book value of $20,000 at the time of exchange. The company paid $170,000 cash and a trade-in of old equipment.

The new equipment costs of $200,000.

Carothers Corporation will record gain on exchange by the journal entry:

Debit Accumulated depreciation $160,000

Debit Equipment $200,000

Credit Cash $170,000

Credit Equipment $180,000

Credit Gain on exchange asset $10,000

You might be interested in

Once mylie's total utility begins to decrease, does each additional singing of the song hurt more than the previous one or less

True [87]

When total utility starts to decrease, each additional song hurts MORE than the previous song.

6 0

2 years ago

Does a rising GDP benefit everyone? Explain

Nastasia [14]

Answer:When a country's GDP is high it means that the country is increasing the amount of production that is taking place in the economy and the citizens have a higher income and hence are spending more. However, increase in GDP does not necessarily increase the prosperity of each and every income class of the nation.

Explanation:

3 0

3 years ago

Listed below are accounts that appear in financial statements.

Kobotan [32]

Answer:

Dividends - <em>Statement of Changes in Retained Earning</em>

Dividends are payments to shareholders from a company's net income. They are derived from the Statement of Changes in Retained Earning because this is where Net Income is sent to. After they are deducted from Retained Earnings, the Earnings form part of Equity.

Differed Revenue - <em>Balance Sheet</em>

Differed Revenue refers to money that was received from a customer or client for goods and/or services that have not yet been delivered. The business will treat them as a liability until they are delivered so they will go under Current Liabilities in the Balance Sheet assuming they are to be fulfilled in 12 months or less which is usually the case.

Service Revenue - <em>Income Statement</em>

These are revenue that the business earns for providing a service when their main source of revenue is by selling goods. It is listed in the Income Statement just after Revenue and is added to Revenue to get Total Revenue.

7 0

3 years ago

What makes a contract different from an agreement?

sashaice [31]

-A contract is legally binding.

5 0

3 years ago

Restore Construction Company enters into a contract to remodel Sam’s Home Store, agreeing to use only products from United Build

BlackZzzverrR [31]

Answer:

Sam’s Home Store can enforce the contract against Restore Construction Company

Explanation:

In contract law, only the parties involved in a contract can take action to enforce the contract. In this case Sam' Home Store signed the contract with Restore, so they can enforce it. Any third party beneficiaries from the contract, like United Building Supplies, are not entitled to enforce anything.

6 0

3 years ago